upon looking into my circumstance, i did read about the MJPEG not being automatic in Mountain Lion and had turned it on manually in terminal a number of days ago. My perian is also up to date. Yet still it will not be recognised in any program. Not sure if anything is conflicting with it, as I am new to video editing, my background is in audio. The .mov file you supplied seems to work perfectly however in all programs and is more or less the same file size which is nice.
I have to still say that the formatting of the .AVI is still strange. Proof of this is that I tried uploading to both youtube and vimeo, but i got errors for both. AVI should work in both situations. But this is different territory all together i suppose.
Based on your playback results for the MOV file version, my guess is that there are at least two issues present on your system—one is the file type problem and the other is either a hardware or configuration problem. Since the AVI files with audio and the audio-free MOV file both play correctly, we can conclude that you have a working MJPEG codec component that can do its job correctly when "allowed" to do so.
Official support for the "legacy" AVI file type was dropped by Microsoft following release of its more modern WMV compression/file type products about 11 years ago. If you read the Wiki article on the AVI file type, you will learn about some of the shortcomings of this file format. You seem to have uncovered an additional issue in that when the interleaved file format does not contain actual interleaved data, the file may fail to play under certain conditions. What those conditions actually are I cannot say at this point. It could be anything from have a Retina display to the possibility of a a software conflict as previously mentioned. At this point all I can say is that the AVI will play on my system but not yours. Finding out why could be a long and arduous process that usually starts with the creation of a pristine start-up drive containing on the basic system apps and running it on a system with all non-essential peripherials remove and testing playpaback. If the AVI file then plays on the "base" system configuration, you then start the process of adding applications and peripherials until such time as you discover a combination that againg prevents the AVI files from playing properly. I assume this is something you would want to avoid if at all prossible.
Im thinking instead of doing further troubleshooting, it may be easier to convert to .mov if you can perhaps provide me the appropriate settings.
Not conversion (in the sense of a transcoding of data) was performed. Basically, all I did was copy your AVI data from the AVI file container and store it in a new MOV file container. In QT 7 Pro, this is a simple "Save As..." file option. Since you say you do not have QT 7 Pro, do you have MPEG Streamclip installed. This free application provides nearly allo of the save and conversions options found in QT 7 Pro (i.e., no compositing features) using the same QT system routines accessed by QT 7 Pro but without having to purchase a key. One of those features is the "Save As..." file menu option. An since the file employs the older 32-bit routines which may mean the AVI file may open natively in the application. In any case, you may wish to give this work flow a try.