In the button’s window, Press F10. You will see a tab entitled Format. In that tab you will see a pull down menu selected with Jpeg. Click on AVI raw, or AVI Jpeg.
Also, if you have sound in you’re sequence I would recommend choosing ffmpeg rather then avi. Once you’ve clicked on ffmpeg, the format tab will now have two other tabs, a video tab, and an audio tab. Click on the audio tab, choose you’re encoding choice. And click on Multiplex audio. Which mean put audio in with video. Next click on the video tab, Choose you’re encoding of choice, including .avi. Then follow the regular procedure. (Click on Do Sequence and ANIM).
Hope that helps.