VideoLan VLC Media Player. I recently tried to watch a .avi movie over 1GB, and the video was perfect, but I could only hear audio from the background. Movies below 1GB play just fine. So is there a limit of how big the movies can be? I have an iPod touch 3rd generation running iOS 5.0
I would recommend converting the movie to a more iPod friendly format using HandBrake
It's free and neat.
http://www.mirovideoconverter.com/ is even simpler than handbrake. Drag - Drop - Choose Format - Sent to iTunes automagically.
iOS VLC has not been updated for over a year - expect these problems to get progressively worse.