How to convert DV AVI to divx or xvid avi

what is the easiest way to encode a DV AVI downloaded from a digital camcorder to a regular progressive divx or xvid video into .avi format for permenant use on my computer… i tried with adobe premiere pro which is suposed to be the best, but what i get, is that i can export only in some redicolous avi formats, something about microsoft avi or uncompressed avi???, even thought i have divx and xvid encoders installed on my computer. can virtualdub do that, is this the best way to go, and what plug -in must i use, couse right now, my unchanged VDM says it cannot read dv avi