An older Philips player i have would play "xvid" files, such as those commonly created by Handbrake & similar tools. This one won't play all those files i had lying around, nor using the standard recipes I'd previously used with ffmpeg.
According to Philips DCP851 manual your device can play DIVX hence the following should apply
Taken out of ffmpeg examples
Convert to DivX
This creates a DivX file, 4:3 aspect ratio, 320x240 resolution, bit rate of 690k for video, 128k for audio. The right sort of size for my Archos AV420 player.
and the same thing for 16:9 ratio.
These ffmpeg options worked for me. Took a while to figure out. This unit is less compatible than an older philips unit I have.
The screen is 480x234 so i use that for
The video tags (vtag) that are being used for AVIs are called fourcc's. www.fourcc.org has a pretty large list of these codes.