Interleaving as a term in "real world" video editing means (although slightly incorrectly) setting a value on how often the audio and video streams in one file are "synchronized".
As a typical video file, whether it is using AVI or some other container format for it, comes in one physical file that includes minimum of two streams -- one for audio and one for video -- the file itself actually "cheats" the video player to believe that it has two separate files available. This means that, in, for example, 10ms interleaving case, every other 10 milliseconds would actually contain audio and every other 10 milliseconds video. Thus, player actually delays the playback by at least 10 milliseconds to get the both data streams to it before it starts playing the file (in our example, it would wait to get (at least) 10 milliseconds' worth of data in, as it needs to buffer the audio that came in first before it can start playing the first frame of the video).
Interleaving settings for AVI files can be (relatively) easily changed with an excellent open source video editor called VirtualDub.
