ipod video's are usually coded for .mp4's or other "Quicktime" formats. HTC Album can actually play these files fine and with much to great degree do a great job at it. You can even use this:
http://www.videora.com/en-us/Converter/iPod/
to convert avi's or other formats to an iPod format. Simply use the iPod touch version since the screen size is the closest (iPod is 3.5, TP2 is 3.6)
Otherwise, you can use Coreplayer since it supports most video file formats
EDIT ADD-ON: I use the converter a lot too...nothing beats watching my House M.D. episodes on the train with the screen tilted up. Best of all, you can set the Pictures and Video's tab to let you flick through the shows