Cubase 6- Video File Handling

Followed advice to install QT.

I could import .AVI file into video, audio track seperately. This .AVI file is converted from .MOV on AVS converter.

Video track displays error " Missing Thumbnail Cache". Hence Video player can not play, when open Video Player or F8 , just display sized black window.

The Audio track plays , but not very clear sound.

The same stand alone .AVI plays fine on windows media player.

I also tried to generate Thumbnail as per manual procedure, nothing happens.

In my Video preferenec the Thumbnail size is set at 50MB.

Any solutions to fix probelm or what is the best format one should use in Cubase for Video import and play back.