Has anybody created a true MMPM/2 handler for formats like DivX/XviD and the like or are we stuck using ersatz apps from the *nix world to enjoy our "DVD backups"?
As far as I know, it has not been done yet. There is a bounty for native MMOS2 codec support posted here in the Bounties section. If you like, add some money to the bounty to help it along.