Is the file an AVI or an MPG? or what format is it on?
and what about the Audio? was it a codec for OGG audio?

First of all i HIGHLY suggest you UNINSTALL any codec packs you may have in your system.
they have unpredictable interactions with the video drivers, they can destabilize the system and introduce conflicts between other codecs.

After you UNINSTALL the codec packs, get these codecs and programs separately:

http://www.doom9.org (Click on the Download Section, Scroll Down and select Avi Editing Tools/show all Avi Editing Tools and look for a program called "Gspot 2.21" this program identifies audio and video codecs in AVIs, displays length, audio and video bitrate, Use this on your AVi to find out what are the codecs)

http://downloads.xvid.org/downloads/xvidcore-1.1.0-beta2.zip  (XVID Video CODEC)

http://www.divx.com/divx/play/download/  (DIVX Video CODEC)

http://www.free-codecs.com/AC3_Filter_download.htm (DirectShow filter for AC3 decoding to play .AVI with AC3 audio tracks and MPEG2)

http://www.free-codecs.com/Ogg_DirectShow_Filters_download.htm (For watching or creating OGG Video)

http://www.free-codecs.com/download/Vorbis_Ogg_ACM.htm (Ogg Audio Codec)

http://www.doom9.org (This is optional... If you want to watch Avi´s that come with separate subtitles then go to the Download/Subtitles Section and download "VobSub 2.23")

That is pretty much all you need for your Video watching needs.

First identify the exact codecs that your AVI has by using the GSPOT Program. I am sure it must be one of the codecs on those links i posted, so go ahead and install those (make sure you uninstall the codec packs and all other previously installed versions)

Now on to your problem:

For encoding your AVI i suggest you use NERO as most likely it will encode and Burn your AVI with great Video and Audio, and if it doesn´t then after you check what audio codecs your avi has we can install the necessary audio codecs for NERO at this page http://neroplugins.cd-rw.org/ (this codecs are separate and only for NERO). But if you want you can go ahead and try again with Ulead Moviefactory 3. And if there is still no audio then go with Nero.

Let me know how it went.

Yeah, try encoding it and burning it with Nero, I am sure the Audio will come out just fine. And if it doesn´t then i´ll guide you step by step on how to install the AC3 audio for Nero.

Good luck