I previously wrote a guide on how to stream movies from your iTunes library on your iPhone or iPad using Home Sharing. The feature only works with iTunes-supported file formats though, meaning that you can only stream videos or movies in formats like MP4 and MOV. Many other video codecs, notably AVI, are not playable by iTunes.
Nevertheless, it is still possible to play AVI videos or movies on iPhone or iPad. You simply need to download the official VLC for Mobile app, which is free on the App Store, and choose one of several methods to get the AVI videos or movies onto your device. Read ahead for step-by-step instructions on how to watch AVI videos or movies on iPhone or iPad.
Update: This app does as much as VLC, and more: WALTR for Mac converts & transfers any video to iPhone and iPad, no iTunes required
How to watch AVI files on iPhone or iPad
1) Download VLC for Mobile on the App Store. Free for iPhone and iPad.
2) Open VLC and tap on the Network tab.
3) Enable Sharing via Wi-Fi.
4) On your Mac or PC, type the network shown into the address bar of your web browser. Example: 192.168.2.18.
5) Click on the plus sign in the top-right corner and open the desired AVI file.
6) The file will be uploaded to your iPhone or iPad over Wi-Fi.
After following these steps, the AVI file should appear within the Media Library in the VLC for Mobile app. VLC supports virtually every common video codec, so this guide can be used for other file formats as well. If you would prefer to upload files using a different method, tap on the Learn More link in VLC instructions on using file sync or uploading media from Google Drive or Dropbox.