I'm using the Oxelon Media Converter to convert AVI to mp4. I've tried several widthxheight / frames/s / and codecs. What does it take to make the iPad happy? Why does Apple make something that should be so simple, so hard?

I haven't really had any issues. Use Handbrake on Universal setting or (my favorite) Nero Recode. Both are pretty easy. You shouldn't need to do too much adjusting to movies.

Personally I agree with you to a certain extent...iTunes should have a built in one touch converter if you ask me. They have it for certain audio files, don't see why they couldn't for some media files as well.

The iPad won't play AVI files at all. Only MP4. Check out my quick guide:
Convert Your Videos - Idiot Proof (Windows)

Some Mac users might not that knowledgeable about video file formats. In other words, iPad supports some types of video cameras watch their AVI footage via the camera card reader accessory, it won't let you watch downloaded AVI movies on the iPad. If you want to play AVI movies downloaded from the internet on you iPad or iPad 3G, you can convert your AVI files to iPad friendly format. AVI files with JPEG compression is high quality, but it's HUGE. So you can also convert them to MP4 format for your iPad. I've been using Handbrake for this. Usually works great with no problems. Takes a long time on my iMac though (avg 4 hours per 2 hour movie). So I also use a third party program called iPad Video Converter for Mac. it works pretty for me, There is a free trial version without time limit and can convert full avi video.

I'm not so good with computers either. What i did was download a free mp4 converter on the web. I drag every avi movies I have and viola they become mp4 and easy to sync to my iPad. I did no adjusting as I don't even have a clue what they meant

I've not used this program and apparently it's not the end all be all, encoding is still the answer where quality is concerned. But many people seem to like this option, I wish I could try it sometime especially after some more tweaking from the developers.

It's called the yxplayer, and the reviews are faitlypretty good.
Mobilesoft

... I have never used the PC version, but a great, FREE converter is MPEG Streamclip from..

Squared 5 - MPEG Streamclip video converter for Mac and Windows

It takes almost any video file and lets you mod it to play on many formats.
I use it to make AVI files because many PC people still do not seem to have QT. You cannot add titles or SloMo .. but you can do simple time edits with it also.

Make note of the specifics that Zimmerman posted and build your vid to suit. Cheers.

Doesn't Handbrake convert the .avi files to .m4v rather than .mp4? I think all mine were converted to .m4v.

Yes they do.