an avi file is an audio stream and a video stream interleaved. you need the proper compression/decompression (codec) scheme installed for each of these.
there is a utility called gspot that will look at the avi and tell you what each of the streams was compressed with to help you on your quest for finding the right codec. the audio is working because whatever type it is (mpeg3, uncompressed, ac3 etc) you already have the codec installed.
installing the divx and xvid video codecs are a good place to start.