it depends what type of AVI it is, DV AVI is what you capture from your digital camera, and it isn't compressed very much at all, so you can edit it frame by frame.
In order to put it on the internet, you'll want to compress it using a codec that retains quality but keeps the file size down.
I'm no expert, but I've done a few clips for the 'net and I used VirtualDub to encode my DV as DivX, which also has the .avi extension.
There's a tutorial for this on the main digital-director site, (you will probably want to skip the bit about the "Premiere frame server", and just open your uncompressed AVI file in VirtualDub):
http://www.digital-director.co.uk/gu...rtualdub-8.htm
There's loads of other options like Windows media, depending on what your audience/purpose is. I'm sure someone with a bit more experience will be able to help further.