If you are reading this now, do check out the App Store here and download the iPad app named CineXplayer. The app enables the user to play all Xvid format movies and videos that are currently not playable on your iPad. So next time you will be able to carry a lot more videos and movies on your iPad that you can watch on the go.
But considering that Apple is not favorable towards such apps, expect the application to be removed from the App Store in a pretty short while. The application is free to download.
While a majority of videos should play without a problem, the developers however note that certain Xvid files may not play and that they are working over the kinks. Also, formats such as mkv and AC3 are not supported currently.
Do let me know in the comments if you were successful in downloading this app from the App Store.