New clix2's firmware 1.02 is released at http://nyaochi.sakura.ne.jp/iriverupdate/

Here is the list of issues being fixed on this update (unconfirmed):
1) Bug fix on SRS WOW LR not belanced
2) Bug fix on interface error when quiting SRS setting.
3) Bug fix on screen and sound frozen due to incorrect setting.
4) Bug fix on capacity error due to file change
5) Bug fix on background frozen after file change
6) Bug fix on error after switching database searching mode
7) Bug fix on unable to play music after sleep mode
8) Bug fix on incorrect sync of music.
9) Bug fix on unstoppable music recording
10) Bug fix on no timer in FM recording

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any updates on what has been upgraded? eg: no need to convert full sized avi?

Dream... the impossible dream.... no luck yet.

Maybe they're only adding some more optimizations for either fixed point codecs or overall Flash performance?

That looks like an important list of bug fixes right there.