we just bought a Panasonic TCP50S30 and this is one format they don't play! I was a bit shocked but only needed to google 'free video converters' to change it to a MKV file. But.....both new TV & new PC can connect wirelessly so when I get them set up with a modem I can use the media centre to watch my movies on our big screen.and skip this altogether.
If .avi files are what you use the most, make sure to check the specs on any new HDTV so you won't be disappointed.
Hopefully there will be a software update for my panny,