WMP's pretty rubbish, you'd probably be better off with media player classic.
Download Gspot and see what it says about the file. You might have a codec clash or something.
for 2-pass rendering, you should just do the first pass, then go back and do the second pass, and the second pass file should be the proper one. You can't play back the first pass file.
If winavi REALLY causes problems with xvid 2-pass, i'd advise you to use something better. Something that actually works properly.