I don't believe that the Pogoplug will play back AVI files natively, thus the transcoding process - which must not be complete. I think you mentioned before that you had over a hundred videos; which on a low-power "computer" like the Pogoplug, will take a while to transcode.
I remember mentioning in another thread that you could try transcoding the files yourself in a program such as Handbrake to MP4 with MP3/AAC audio encoding, in a small enough size that it is streamable. Try that and see if it works for you. Since you have so many video files, using a higher powered PC to transcode them might be a better solution.
Even after my external hardrive running constant for 3 days and still transcoding. But even after that popoplug will not play avi files.
So what you are saying is that I have to make an mp4 folder for all of my movies so they can play on my iphone? Because mp4 movies do not look good on a 47 inch tv screen. That is why I have avi files. I stream to my xbox 360 as well
That is one way to take care of the issue. You would not want to stream the same file format to your iPhone that you would stream to your TV, mostly because of bandwidth issues.
If it were me, to save transcoding time (whether on the Pogoplug or with a separate program) I would transcode only the movies I wanted to watch at the time rather than all at once - but you could certainly do all of them as well so you have access to any movie at any time.

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