Does AVex support MPEG4?

Yes, here's how:

Try to use the AVex iPod Video Converter(batch mode) to convert the mp4 format, or download some mpeg4 codec, such as k-lite, media player classic, etc, and try again.

Here's how we converted the mpeg4 file:
We downloaded the latest version K-lite Codec Pack Full, and install it in our testing PCs.

Then we go to windows' "Start" menu -> click "All Programs" -> click "K-lite Codec Pack" -> select "Confirguration" -> click "Divx Decoder" -> check the box "Support decoding of Generic MPEG-4 video".

And there you go, we can start converting mpeg4 file into avi or wmv format file, using AVex DVD to iPod Video Suite.