How can I watch an AVI file on my iPhone?
Solution 1:
Use HandBrake to easily convert the AVI files to an iPhone compatible format then sync those converted files with your iPhone
Or, email/post them to Posterous, and they'll be auto-converted into a format watchable on your iPhone
Solution 2:
There are plenty of apps which will allow your iPhone to support .avi files...
For starters, there is the all-time favorite VLC (free) . You get the file-support and the friendly user interface like you're used to on your Mac.
Then there is AcePlayer ($2.99) which will even support more files, is extremely user friendly and this app is close to my favorite.
But my all time favorite app is CineX-Player ($1.99). They tend to do some actions where you can get this app with a discount (or even free).
All of these apps are easily managed by iTunes File Sharing:
They all support a lot of files (including your requested .avi), subtitles and they all have a nice and clear interface. I can highly recommend CineX-Player, but VLC is great as well and it's free!
Solution 3:
Quicktime will do this too: File → Save as and then choose iPhone from the format list.