iv been trying to fix this problem for a couple of days now.. i googled it ... searched every forum online .. and it seems like i am the only person who seems to have this problem
when i drag and drop a avi file into airflick it gives me an error "cannot transcode file. mediastreamsegmenter not found"
i tried different versions of vlc and airflick .. but nothing .. same result .. i thought it may be my MBP (intel i5, os x 10.7.2), so i tried my moms MPB and got the same result ..

im not sure if its me doing something wrong or what ... help pls

mediastreamsegmenter comes with Xcode.

I believe airflick uses vlc for the transcoding, i maybe wrong though
so are you saying i have to download xcode for lion and everything will be fine ? is there any alternative ?

Sorry, it's not in the dev tools, it in the live streaming tools:
HTTP Live Streaming Resources — Apple Developer
Grab the HTTP Live Streaming Tools (You may need to be a paid developer to get them).
See the overview, VLC is the encoder, but you still need the segmenter.