After a lot of time and effort, I've given up trying to figure out the VICS video format. It looks like the only way to encode it will be with the proprietary PC-only encoder. So after looking around a bit for an alternative player I've discovered an app called SmartMovie that can not only play full screen video, it does it with better (in my opinion) quality picture than VICS.
After some testing I've concluded that SmartMovie is pretty impressive - given a decent bitrate the full screen video is of eye-popping quality. The app is advertised as being an xvid player, but I have learnt that it can also play DivX 5.1 video.
As far as content generation goes, the software package includes an encoder for the PC platform. I've tried it out on a PC at work, and it works very well and is amazingly fast. Unfortunately there is no Mac equivalent so we'll have to work out a manual method of conversion, however I'm not too worried - xvid and divx encoding on the Mac is pretty good these days. I've had a few brief stabs at converting to a format SmartMovie accepts, but ran into a couple of bugs with ffmpegX. I'm confident I'll get it worked out soon though! Watch this space