Several sources state, that this codec is the optimum codec for encoding screencasts taken with CamStudio. I downloaded it and did the setup. I get avi files when recording. But I cannot play them back. I tried using VLC Video Player, Windows Media Player and DivX Player but none of them can playback the encoded files. What do I need to additionaly install?
I haven't tried that codec, but...
VLC can usually play pretty much anything you throw at it, but IIRC doesn't use codecs installed in Windows - only the ones it has built in. This means installing new codecs into Windows won't allow VLC to play any more files than it already could.
One possibility is to try Media Player Classic. You can get this in a few downloads such as Quicktime Alternative, Real Alternative, and (probably the best option) the K-Lite Codec pack. Get the standard or full K-Lite pack - the basic one doesn't include media player classic.
An extra bonus is that as well as installing a bunch of new codecs, the K-Lite installer also tries to detect existing broken ones and replace or remove them.
If that doesn't help (and since you already tried Microsofts Media Player anyway), my first guess would be that the codec didn't get installed and configured correctly, or is buggy - it may be a good idea to uninstall and reinstall, and to look for new versions. Also, if you're running 64-bit Windows, you probably need the 64-bit and 32-bit versions of the codec - 32-bit applications will still need the 32-bit codec.
BTW - it turns out that setting a system recovery point is a good idea before doing anything involving installing/removing codecs. It turns out that not all have uninstallers, some either fail to install correctly or conflict with something or in some way get broken, and trying to identify codec DLLs to delete by searching in the System32 folder is both dangerous if you make a mistake, and is tedious in any case - though at least CCleaner can handle the registry tidy-up afterwards.
I've also heard that Any Video Converter is pretty good for recovering corrupt AVI files, though I haven't tried it myself - any corrupt files I've had weren't worth trying to recover.