I have the same problem with my capture Card, but I think it's because we needs some encoding software or something. I'm not sure, never looked in to it, as I don't record often anyway.
At the AVerMedia site, in the specs they show mpeg4 with an asterisk but there is no comment on what that means. Further down the specs it says "MPEG 4 Codec Available From www.xvid.org or www.divx.com". I would try getting and installing those codecs.