I have imtoo mpeg encoder and i'm trying to convert a MPEG2 movie that's 4GB to a smaller file around right under 1GB but still retain good quality. I've tried converting it with both Divx and Xvid and whenever I go to open the movie in ANY of my media players it says it cannot render the file or it says it cannot recognize the codec used to compress the file. I have downloaded the codec from divx and xvid and still get the same message. I have Vista home premium 32 bit if that helps, i've also downloaded K-Lite mega codec pack and still nothing plays my converted xvid or divx. I have players ranging from winamp, windows media player, divx player, xvid player, Nero showtime etc.. Finally I gave up on converting to xvid or divx and and tried SVCD and when I do that the audio is out of sync with the video anything I could do to fix that? If someone knows anything about the problem stated above with the divx xvid codec issue please PLEASE don't hesitate to say anything!! thank in advance.

Maybe it's the problem of the divx/xvid codec which you have downloaded. Please download the DivX from the official website divx.com. If the codec is right, you might read the files.
Also, you can try to set the output profile as mp4 format.