Mike Richter wrote:

The fact that your AVI is not compliant does not mean that the
software is broken.

Mike

Compliant? To what? AVI is just a wrapper, like Apple Quicktime mov file;
Any number of codec can be used to form and compress an AVI file. If Nero
require specifics, it should release a complete data sheet of their
requirements with the software; if they don't, then I'm inclined to think
that their software is "broken".