If you ummarked "Generic MPEG-4" then your video is NOT DivX, but XviD, which is also an mpeg-4 codec. DivX was trying to decode it and probably another codec (like XviD or ffdshow) was trying the same thing. Hence, it didn't work.
IF the problem is with an audio stream, which is your case, the correct way to fix it would be removing the audio stream, either via the KILLAUDIO() command in AviSynth of by creating a new AVI in vdub without the audio stream.
However, the footage is still choppy, as you said yourself. The solution:
These files are not accurate because of the lossy encoding. Convert them to a lossless codec.
"How do I do that?", you ask?
Look no further.
Here's how you do it:
1: open the MKV/OGM in virtualdubmod,
2: go to the "streams" tab, deactivate all audio,
3: then go to the "video" tab and select "Direct Stream Copy"
4: now File>Save As... and save as an AVI.
You'll have the video with no audio in AVI. If the file doesn't open in VDM, load it through a directshowsource AVS with the killaudio() command.
IF IT STILL DOESN'T WORK, you need to convert to lossless:
1: Download HuffYUV
2: Open VirtualDubMod again, deactivate the audio, but this time select "Fast Recompress" on the video tab.
3: Video>Compression, select HuffYUV.
4: File>Save As...
Done. You have a huge lossless AVI file. If it's too big, then save clips rather than entire episodes.
If your method worked, then it's perfectly fine, but for future reference, or in case a similar problem comes up that can't be fixed by your method, this is the right way to do it.