Converting .avi to .mp4: No audio

I am trying to convert an avi to mp4 so I can play it on my ipod. I only plan on doing this 1 file so it makes no sense for me to purchase Quicktime Pro or VisualHub, so my options are iSquint and MPEG Streamclip.
After trying within iSquint, the conversion works but the quality of the mp4 file is almost unwatchable.

I then tried it in MPEG Streamclip but this is where my problem begins. No matter what I do I can't get audio on any output file. The avi file plays normally in Quicktime and VLC, but I've noticed that in the player in Streamclip there is no audio.
Even exporting to other output files gives no relief either.

I've looked at http://discussions.apple.com/thread.jspa?threadID=1616285&tstart=0 that addresses a similar problem but don't see anything to help my specific situation.

Some possible useful info:

~/Library/Quicktime contains -

AppleIntermediateCodec.component
AppleMPEG2Codec.component
DivXDecoder.component
DivXEncoder.component
Flip4Mac WMV Advanced.component
Flip4Mac WMV Export.component
Flip4Mac WMV Import.component
(note the first 3 file have a white lego block as their icon, the second 3 have a white page as their icon.)

When playing the file in Quicktime the Quicktime Movie Inspector gives this info:

NMP1.avi
DivX

Format: DivX 6.0, 608 x 246, Unknown MPEG Layer 3, Stereo, 44.100 kHz
FPS: 23.98
Data Rate: 708.03 kbits/s
Normal Size: 608 x 246 pixels
Current Size: 608 x 246 (Actual)

While the file is in the MPEG Streamclip player the Stream Info displays

Bit Rate: 0.75 Mbps
Video Tracks:
DivX 5.0, 608 × 246, 23.976 fps, 634 kbps

Audio Tracks:
MPEG Layer-3 Audio stereo, 44.1 kHz, 112 kbps

Stream Files:
NMP1.avi (790.21 MB)


Does anyone know what is causing this problem and/ or know how to fix it?

Running 10.5.4 on Macbook 2.16GHz C2D 2GB
Quicktime Player v7.5
MPEG Streamclip v1.9.1
VLC v0.8.6i

thanks, b.

(ps I didn't know which section to put this thread under so went with Quicktime as a safe bet.)

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