The way Air Video works is that you need to install their free software on your computer and then the iPhone/iPad app connects wirelessly to that and lets you watch your videos on your device.
There are two features that make Air Video really great.
- Using Air Video you can connect and watch your videos from anywhere in the world that has Wifi (actually 3G too), you don't have to be on your local home network
- It supports video formats that aren't supported natively on the iPad/iPhone. So if you have a video that is not in a format that iOS can play, Air Video will convert it on fly for you and stream it directly to you. You don't even need to wait until the entire video is converted, it starts playing almost immediately. So now you can watch formats like avi, DivX, and mkv on your iPad, without conversion.
If you want to store your video inside the device instead of streaming it, Air Video will convert it for you to iPhone friendly format and let you save it on your device for viewing offline.
Air Video costs $2.99 and is a universal app the works on both you iPhone and iPad (it's much funner to watch movies on your iPad but both work). There is a limited free version that doesn't let you see all your files.
Bottom line: if you have videos on your laptop or home computer, get this app.