I'm by no means an expert in anything, but I use the program enough to know the basics. So if I'm not using the technical term for something, bugger off :P
Without further ado,
First you're going to want to open your AVI, which I'm just going to assume you know how to do.
Now, you're gonna want to get to the point at which the clip you want starts. Either you drag the slider to the approximate point, or you just watch the movie and wait until you get to that point. Once you get to that point, stop the AVI. This is where you want to set your 'mark in.'
After clicking that button, a little arrow should appear on the tracking bar.
Now you need to play the .avi again, until you get to the point where you want your clip to end. Again, stop the AVI. This is where you want to set your 'mark out.'
After doing that, another arrow will appear, and the duration of your clip will be highlighted in the tracking bar.
To save this selection as an .avi, go to File >> Save as AVI, and go on from there.
You can also save the selection as screencaps by going to File >> Save Image Sequence. A dialogue box will appear, letting you choose which format you want the caps in (TARGA or BMP) and where you would like them saved.
A couple of tips:
* Marks cannot be set if the video is playing. You must stop play. This also applies to dragging the slider bar.
* There are forward and back buttons that allow you to go forward or back frame by frame. These also will not work if the video is playing. I mainly use this to make my AVIs as small as possible before opening them in animation shop.
So there you have it. A pretty basic tutorial. My first (and probably only) ever. I hope it helped someone. If you have any questions, I'd be happy to try and answer them, but like I said, I'm no expert. I only use VD to snip my videos to make movie icons. If you need/want VD to do more than that, I'm not the person you want to talk to.