I doubt zSuite will bring AVI functionality. Thats solely upto microsoft. You will need to convert your Avis.
When converting / ripping your Video, always slect the highest quality that is available compatibility wise for the
Zune. Best Audio settings in rippers and converters are always fine. Use a 320 x 240 resolution at about 700kbs data and it should be great, some have pushed the limits further, like myself, and handled 1200kbs+ video files on the
Zune with little problem, its all personal preferenc.