1. A lot of people are confused between codec and container. divx/Xvid follows MPEG4 standard. However, most of the videos use the .avi container, which is not supported by many manufactures, including Apple iPods and Sony. You can actually encode using divx/xvid with certain setting (simple profile) using AAC for the audio (instead of MP3) and .mp4 container, and the video will be compatible. So, to put it correctly, it's the support for .avi that you want.
2. H.264 is the standard anyway, more efficient, much higher quality, and more widely supported by the industry.
I rather see support for matroska container myself.