First, do yourself a favor and register the product so that you get the full 30 day trial. The reason I say this (and I am just a user) is that this is the most stable and user friendly product that I know of, and I own or have tried virtually all of the others on the market.
Forget about the .avi files for now. .avi is a container, not a video format which has it's own problems. Let's focus on the .mp4 files (MPEG-4) at this time. When you drag one of these files what exact error do you get?
Second - be more specific about the problem see here.
Third - did you read the specifications in order to select the correct version before downloading? If not do so - you may find the answer to your problem.
Fourth - read the pdf manual installed with the software
Which version of MEP17 did you download, Basic, Plus or Premium? Basic does not come with a lot of codecs - these have to be purchased seperately- see above about specifications.
Also how did you manage to download version 17 - I can only see version 18 (MX) available for download?