Reading through this thread, it has become apparent what a mess Apple has made of video playing on the iPad. Just support the standards already will you Apple? If your tablet cannot even play avi natively, then "they blew it". I guess if they made it easy, then they might lose some iTunes sales.
There you go. Hating on Apple again.
It is the iPhone OS. It can't do anything an iPhone can do.
It's not a laptop. It doesn't have the same features. It was never promoted as having those features.
WMV is WINDOWS media video. It doesn't even play natively on Mac!
As far as AVI, does the iPhone play AVI? The iPod touch? If the answer is no, then you shouldn't have expected different on a virtually giant-sized iPod Touch/iPhone.
Apple hasn't made a mess of what they offered, you're making a mess of what you expect Apple to have done.