Input: Xvid uses temporal compression, which is not suitable for editing. Using Xvid files as source clips will cause you a lot of grief. Convert them to “uncompressed AVI” or “DV AVI” before importing them into Premiere Pro.
Output: Export your Premiere Pro project to an “uncompressed AVI” or “DV AVI” file and then use other software to encode to Xvid. Another possibility is to install Frameserver plugin (Debugmode Frameserver) and frameserve to another program, such as VirtualDub. One would File->Export->Movie and choose Frameserve as output format. This approach saves disk space (no need for an extra large file).