I converted a .avi file I had (not sure if it was Divx or Xvid) with PocketDivxEncoder. I then transferred it to my Sprint Touch. When I played it with TCPMP, it was choppy and played around 1-2fps. I downloaded Divx Mobile Player (
http://mobile.divx.com/divx) and tried that and it was perfect!!
I know it may not do other file formats but I mostly use .avi file types anyway. Just FYI
I'm not sure how taxing it is on the phone battery.