Hi bremze..
There is the easy way or the hard way to watch divx files via ur DM500s..
The hard way is the way you're are doing it

with VLC plugin, I could never get the darn thing to work or would work today and gone tomorrow.
Now the easy way that I've been using for the last few months.. Download a proggy called winavi converter, convert your divx or xvid or whatever to mpeg2 format on your pc ( in the setting choose whatever suits you ) which by the way on my pc 3.4 p4 1Gig ram takes about 2 minutes to convert a whole divx movies to mpeg2 without any loss of quality. Then on your Dm500s, go to file mode and you will see your movie there now, of course all of this assuming you did set up NFS on both your PC and DM500S. I found that doing it this way, I don't have to deal or mess around with any plug-ins on my Dreambox which is behaving nicely lately

, I'm just getting too old I guess..
Good luck mate.
Cheers from CY