What is the best way to email AVI files (taken with my digital camera)
to my friends? I use earthlink webmail, not outlook. Right now it is
telling me that the file is too big. Thanks.

Have you considered uploading the file to a service such as YouSendIt?

http://beta.yousendit.com/

Instead of mailing them why not upload them to an online store from
which your friend(s) can download whenever they like.

Try rapidshare / megaupload for excellent upload and download speeds.

Or look at esnips, et al.