Instructions
Move the File
Right-click on your desktop and select "New" and "Folder." Title the folder "PS3Videos."
Open the location where your AVI file is located that is not being recognized.
Left-click on the AVI file and drag it from its starting location to the "PS3Videos" folder. Release the mouse button.
Open PS3 Video 9 and click "Convert." Click "Select File" and navigate to the new file location. Proceed as normal.
Rename
Locate your file on your computer. Check the name of the file for any periods in the file name aside from the period between the name and "AVI." For example, a file should not be called "test.video.avi."
Right-click the file and select "Rename." Remove the extraneous periods as well as any other characters that are not numbers or letters.
Attempt to open the file again in PS3 Video 9.
Troubleshoot Mode
Click "Video File" from the top menu bar of PS3 Video 9. Select "Normal Mode."
Click "Troubleshoot" from the bottom window of the application.
Open the drop-down menu under "Video Encoder" and select "Alternate Decoder #1." Select "A/V Sync Fix #1" from the drop-down box under the "Audio/Video Sync" heading.
Highlight and click the "Normal Mode" button on the bottom of the application. Click "Select File" and attempt to convert the AVI file again.