A while ago, I bought an Xbox 360. I actually bought it in Barcelona during ITForum 2006 because I did not win one from the Windows Server Virtualization guys during one of their contests. Maybe for the better because they gave away Xbox 360 Core and I really wanted a Premium version.
Anyway, the Xbox 360 can also be used as a Media Center Extender. Because I run Windows Vista Ultimate on my laptop, I can use it with that.
Technically, it all works but there are some serious issues with Xbox 360 as an extender. First of all, the Xbox is way to noisy. Compared to my Pinnacle ShowCenter 200, which is completely silent, it does not stand a chance. Secondly, and even more annoying, is the fact that the Xbox does not support streaming DivX and Xvid to it. There are some solutions to fix that and one of those with support for Vista is Transcode 360. It is still in beta but I tried it and it works fine.
Be aware of the fact that a solution like Transcode 360 actually converts the video from DivX/Xvid format to a format that the Xbox understands. On my laptop (HP nw8000) this results in 70%-90% CPU load. When you stop watching a transcoded video on the Xbox, the transcoding process keeps running on the media center. You need to kill that with Task Manager to stop it.
For these two reasons (noise and lack of DivX/Xvid support), it will not replace my ShowCenter any time soon.




