My N800 came back from the doctors last week with its new screen and the first thing I did was to upgrade the software to test out the improvements in OS2007. According to the publicity, the video playback was improved so I loaded up one of the Xvid files I have from my PVR. (1mbps) and sure enough it played as smooth as silk. Not only that, but it carried on playing for over 3 and a half hours!
So if you’re a DivX person and you’ve got all your content in reasonable sized DivX/Xvid formats, the N800 will oblige and make a nice media player for you.