DV files are rarely supported by chip makers. Even when DV was the pinacle of SD quality...DVD chips used by SD mediplayers didn't support it, becuase DVD players didn't support it. Now Mediaplayers are using Bluray chips, and only support HD camcorders becuase they use the same compression as used by Bluray disks.
So those wanting to play their DV.avi media cannot do it without conversion. There are a number of options:-
1)Setup a transcoding Upnp server on a NAS (or PC) and host all your DV.AVI on that. No one can say how good this is going to be...as it depends upon the power of the NAS to transcode in real time.
2)Convert using a Video Editor. If you have a good editor..you can open the dv.avi, ,and then render it again using a different codec. This ususaly means mpeg-2 with the origonal editor you migh have used for DV editing. H264 is often limited to low bitrate ipod video by cheaper, and older editors.
3)Convert manually using free tools. This is the method I shall describe.
The tools used may not have installers. Check this for instructions on installing:-http://www.mede8erforum.com/index.php/topic,7661.0.html
The first thing to do is convert the video using Blaze. This is described here:-http://www.mede8erforum.com/index.php/topic,5976.0.html
The default bitrate using the xbox profile is low...so when setting up use 4000-8000.
The next thing to do is to demux the audio from the origonal dv.avi. Install VirtualDub (Mod):-http://www.afterdawn.com/software/audio_video/video_editing/virtualdubmod.cfm
Run virtualdubmod..and use File, top left, to open the dv.avi. It will report an error...saying only Stream Mode is supported. This is expected. Select Streams off the row of commands...then Stream List. You will be shown a list that only has the audio from the dv.avi. Select Save Wav..including .wav in the name.
You now have two files, one video, one audio. You can now mux these using the muxer of your choice. That could be mkvmerge or tsmuxer gui.