The one I'd recommend is
VirtualDubMod.??It's old, but one of the best .avi handlers, and reads mkv containers.??Will not work with any mpeg derivatives, but presumably you can find something else for that.
If you already have a program you like to work with the avi,
MKVExtractGUI is a simple program for unpacking mkv.
EDIT: It occurs to me you may want to check out
AMVapp. It's a packet of free programs compiled by the editing crowd at animemusicvideos.org and contains a bunch of nifty widgets for reformatting video.
Kroggles ensures the living stay living, and the dead stay dead.
Clobberella beats you up.
Teela Brown has a birdie!
Flosshilde communes with the very souls of the damned.
Walsung is actually pretty cool. For a guy made of metal.