It appears that SMC cannot write filenames that are outside of ASCII. Trying the following will reproduce:
1. Copy “Bear.avi” (or any short video that you have handy – I used this from Sample Videos in Vista) to “くま.avi”;
2. Start SMC and Add Media the latter file (which displays fine in SMC);
3. Convert Media it (SMC pretends as if there is nothing wrong, and reports successful conversion);
4. Open Fuze’s Video Folder — you do not find the *.avi nor *.thm file.
Repeating steps 2 thru 4 with the “Bear.avi” instead would give you an expected result – on Fuze you can view the Bear.
