OK, I'm geeking a bit. I requested the VL420M manual from Vizio last night, and it just popped into my inbox about a half an hour ago. Here's what it says about the USB:
Multimedia Viewer Specifications:
Supported File Extensions:
Video: .asf, .wmv, .avi, .mp4, .mov, .mpg, .mpeg, .vob (DVD)
Image: .jpg, .jpeg (up to 17,000 x 10,000 pixels)
Readable Data Format FAT and FAT32
Maximum folder depth: Folders can be up to 20 levels deep. The first folder on the drive is Level 1. A folder within that folder is Level 2, a folder within that folder is Level 3, etc.
Display Limits: The Multimedia Viewer will show the first 1000 folders and 1000 files in the list
[OK, this next part was in a table, so it's a bit jumbled from cut and paste]
Supported File Formats
The following are the supported file formats that can be played on your HDTV. Media server content protected by digital rights management such as WMDRM10 (Windows Media Digital Rights Management 10), may not play.
File Extension Video Decoders Supported Audio Decoders Supported Res. Supported
.avi H.264/AVC AAC Up to 1920 x 1080
.mp4 MPEG 4 ASP AAC Up to 1280 x 720
Up to 1920 x 1080
.mov H.264/AVC AAC Up to 1920 x 1080
MPEG2 AC3 Up to 1920 x 1080
.vob MPEG2 AC3 Up to 1920 x 1080
Note: Even the supported format files listed above may or may not play properly or completely, depending
on the USB device, bit rate stream and other content characteristics, as well as other factors.
Still not sure all it will play (DivX and Xvid are mp4 implementations in .avi containers, so it may play...or it may not), but this makes me much more hopeful that a previous poster was simply misinformed.