Adobe Premiere Error: "Unsupported compression format"
When importing an AVI file, Premiere Pro sometimes returns the error "Unable to open that file. File uses an unsupported compression format." This often happens with AVI files that were created by digital still cameras or software that doesn't correctly support the AVI standard.
Here are two possible solutions:
(1) Change the Extension
Before importing the file, change the filename extension from .avi to .mpg. This makes Premiere use a different, more tolerant importer which may accept the file as valid.
(2) Transcode the File
Transcoding means converting from one encoding scheme to a different one. Try using a different program to open the file (e.g. VirtualDub, Windows Movie Maker or Apple QuickTime Pro). If you can get the file to open, save it in a different format (e.g. .mov, .wmv). You should then be able to import the new file into Premiere. Note that this may result in a loss of picture quality.