You dont have to encode the movie to divx with Virtual Dub cuz it will take much time and you will lose quality of the picture.
Use instead this program called "AVI FourCC Code Changer" to change the codec to divx and it will take just some seconds with no quality lose.
AVI FourCC Code Changer ī
The "AVI FourCC Code Changer" is also included in the K-Lite Codec Pack.