i am not sure if mplayer works on the n770 but you CAN play divx steams via mplayer. you need to run it from the command line. i am on the tablet and don't have the link handy but you can find the info in the doco for the mplayer on the project page.

some streams are too much for the tablet but you can re-encode the video yourself if it is covenient. i use Divx encoder to re-encode for my n800.