try double-left-clicking the file, hopefully it will install/merge by itself.

If this doesnt work you may have to follow the suggestion provided by SupaStart earlier

All you have to do to fix this problem is delete the registry key: HKEY_LOCAL_MACHINESOFTWAREClassesCLSID{87D62D94-71B3-4b9a-9489-5FE6850DC73E}InProcServer32
Hope it works out for you. If this is too much - editing Registry can be dangerous - you can simply delete the avi file via the command prompt.

good luck.