CineXPlayer will play Xvids etc., & costs £1.79 on the App Store. I've not used it myself, as I managed to grab VLC before it was pulled.
I use a combination of things for video:
iTunes-friendly videos:
1) Sync on to the iPad with iTunes, and play with the Videos app.
2) Stream to the iPad using
iTunes Home Sharing.
iTunes-unfriendly videos:
1) Sync on to the iPad with iTunes, and play with VLC.
2) Stream to the iPad using
Air Video.