Hmm . . . comes with a Utility MPEG2 Component ML app with no explanation of what it's for?
The utility app is an "assistant PKG installer." It allows Lion and Mountain Lion users to install the older QT MPEG-2 Playback Component installer PKG file which is not allowed to run on its own under Lion or Mountain Lion since these operating systems already have a QT X only MPEG-2 component embedded in the QT embedded structure. Without this utility you would have to either copy the component from an older system to your Lion or Mountain Lion system, use Pacifist for installation, or manually open the PKG contents and transfer the component to the appropriate component folder.
As to your "discussion" regarding the playback of AVI file types, there are really only two strategies here:
1) You can add component support so that QT can play the files natively or
2) You can convert the file contents to compression formats that are natively compatible with the unmodified QT component configuration.
Each user should decide for his or her own self which approach best suits their needs for a particular source file. In most cases, conforming the system's codec component configuration to play the source file directly results in higher video quality since no transcoding takes place but this strategy will not work if a codec which is required is not available for the user's operating system. On the other hand, converter utilities tend to support more built-in codecs and are easier to use since the user does not have to concern him or herself with the nature of the particular source compression formats but at the risk of some potential loss in visual quality. As to what converter to use, once again this is a matter of personal choice. In the case of commercial converters like iSkysoft, the codecs are built in while MPEG Streamclip accesses the host operating system's QT codec component configuration. I personally prefer the free HandBrake app for AVI, MKV, TS, MTS, and M2TS conversions since it has an exceptionally full-featured X.264 GUI with some user options that 97% of users are likely to never use.