If you have a PC with a CPU working frequency above 500MHz you can use BSplayer v1.37 with ffdshow and still watch all your avi files without problems! No need to use BSplayer v0.86.501! BSplayer is able to play all the files for which you have installed a working codec...
Have you also tried to use the DivX codec for Win98/ME hosted by
http://www.free-codecs.com/DivX_Free_download.htm ?
If it doesn't work, at free-codecs there is a forum where you can post your problem:
http://www.click-now.net/forums/index.php?showforum=8
If you prefer you can also use the BSplayer latest version (be aware of the fact that it contains an adware client side program in it). The choice is your.