I just wrote a simple video reading example with openCV2.3.1, but it seems that I cannot open avi video anyway :(
Vid
I'm just adding on to this since I spent more time than I'd like to admit. Not being able to open the file caused a ton of strange exceptions.
If you find that absolute paths work, while relative paths don't work, another thing to check is to make sure that the working directory set properly.
In Visual Studio this is Project Properties (Configuration Properties) -> Debugging -> Working Directory. I found mine set to "$(ProjectDir)" by default when I really wanted "$(OutDir)".