Please open the AVI file in the Windows Media Player. Sometimes Media Player will automatically download and install the necessary codec when you load the file.
If the codec is not installed automatically, in Media Player click File >> Properties. The first tab of the Properties window will show both the audio and video codecs used in the AVI file. You can now locate the codecs on the Web and download them.
Once the codecs are installed, Video Edit Magic will be able to load and edit the AVI file.