Thanks for the extra information!
First of all, IMAQ Vision 7.0 has builtin support for reading and writing AVIs with compression, as well as support for attaching data to each frame of an AVI, so you might want to take a look at that if speed/size is an issue here or you have data you'd like to store in the AVI.
It looks like the problem is that the AVI_Init_Write.vi assumes that you're writing images from the IMAQ Session, and so uses properties of the session to determine the width, height, and bits per pixel of the images to write. Since you passed in a constant session, these are probably all being set to 0, which explains why the output file is so small.
You can change the AVI_Init_Write.vi file to not take in an AVI session, and make
the three properties it gets from the session (image width, image height, bits per pixel) inputs to the VI. Then, just pass those in (bits per pixel will be 8 for your monochrome images), and see what happens.
Let me know how this works!
Greg Stoll
IMAQ R & D
National Instruments
Greg Stoll
LabVIEW R&D