There was a time… just a few short months ago, when it was incredibly difficult to find a media player for Google Android which could handle video formats such as DivX, Xvid, MKV, WMV, FLV and RMVB. Basically the default Android video player could handle H.264 and MP4 files, as well as any other formats natively supported by your phone, and that was it.
Now there are a number of third party apps that support a wide range of video formats, including Rockplayer, arcMedia, and now a new app called VPlayer, which uses FFmpeg to decode videos.
VPlayer is still technically in alpha testing, but it works great on my Google Nexus One. The app is about as simple as can be. Upon launch you’re presented with a file browser. Find the video file you want to play and click it to start playback. If your phone runs Android 2.1 and up, and has a fast enough CPU, it can probably handle most formats.