OK, if you need to decode AC3 and other contnet, you can either download specific codec from xVid or for Free-Codecs.com :: Download AC3 Filter 1.02a test8 : AC3 Filter is a DirectShow filter for AC3 decoding.
However, most folks will be happier with "FFDshow":http://www.afterdawn.com/software/video_software/codecs_and_filters/ffdshow.cfm, this is a multiformat decoder includes video formats including Xvid, Dvix, WMV, MPEG-1 and MPEG-2 as well as H.264
Also, for audio, it decodes AC3, DTS, MP3 and Ogg Vorbis. So, its a good choice for general decoding and it means that any DirectShow capable player can do this. In a real sense FFDShow is the universal deocder.
It is open source and actually uses less CPU power than Xvid and Dvix codecs as well.