Is it possible to play AVI files on the player just like MPG – is there a firmware?
Welcome to the forum 
I assume you mean the LVW-5045, as there is no LVW-5040 as far as I’m aware of. 
Unfortunately, the LVW-5045 is incapable of playing .AVI files, even with the latest firmware. However, the LVW-5045GDL+ can play MPEG4 & DivX .AVI files as well as DivX .DIV and .DIVX files.
If you are interested in seeing all the codec’s both are capable of handling, this is LiteOn’s specifications page for the LVW-5045 and also LiteOn’s specifications page for the LVW-5045GDL+ (European versions).