what does this error mean?
 

When I open a xvid movie in virtualdub, I get
"warning: nothing to output
bframe decoder lag"
message.
When I load my AVS script in tmpgenc, I get a bit different error
"AVISource autodetect: couldn't open file
Error code: 3"
Because of this, I can't convert it to kvcd!
Does anybody know how to fix this error?

I guess you are not encoding a real xvid but an ogm container renamed with .avi as extension.

I have also this error and that is not a problem to encode in KVCD but you have to skip the first frame (and start from the second one).
You must also drop the audio as the ogg vorbis audio codec isn't supported by avisynth nor tmpgenc.