I get the same thing...
An error has occured while creating the media file untitled.avi.
An error occured while converting with a codec.
I've noticed the error only seems to be if I try making the video in HD quality. The sound codec has nothing to do with it because I've tried all of them. I have the DviX codec as well as CCCP. That is it.
Does anyone have an idea as to how to fix this issue?