yxplayer can play XviD and other video formats on the iPad (iTunes) →

You connect your iPad to iTunes, drag files in much like you would iWork documents, and all your unconverted videos are now playable on the iPad. Unfortunately though, the resultant playback isn’t exactly smooth as butter. Regular AVIs stutter like on a Nokia phone, MKVs aren’t worth trying, and don’t even try playing anything high def, it’s not watchable. Not to mention the UI.

Perhaps the performance of yxplayer will improve over time, but as of right now, the best way to play non-h264 video on the iPad is still Air Video.