You get that error with VirtualDUB only because it cant handle a VBR Audio stream. The problem lies with VirtualDUB not your AVI. Assuming your AVI plays perfectly on the PC then thats the way it supose to do it. NanDUB (a re-write of VirtualDUB but no longer suported by the author) does handle VBR audio.
Most/many new AVI (DivX) are now made with VBR audio as it can make a smaller AVI, thats all.
If you really want to convert it to non-VBR or CBR MP3 audio, load AVI into NanDUB, in Audio tab, change to Full Prosessing mode, then select Compression, selct MP3 and choice the audio characteristics you want, (ie 48khz, 160bps Stereo or whatever). Then select Video tab and set to Direct Stream Copy. Go to File and select Save AVI. Give it a new name and wait for the job to finish. Done.