The xcard does not support the output of any type of video file apart from Mpeg 1 and 2. What you are trying to do is not currently possible.
The future implementation of realtime transcoding of Divx/Xvid/etc to Mpeg2 would fix this issue (much in the way the Hauppauge MVP software does transcoding). However this requires a grunty PC to be able to handle the transcoding processor overhead.
The possibility of doing this in GBPVR has been discussed elsewhere and is up to Sub if he wishes to look at this functionality at some point. (I hope he does so I can see AVI's etc on my MVP)
Windows Server 2003 SP1 on AMD XP2200+, 1 Gig DDR Ram, 1 x 200 Gig and 1 x 160 Gig Seagate Harddrives, Hauppauge PVR500MCE
2 x Hauppauge MVP's (Bedroom and Lounge)