http://www.engadget.com/2007/09/06/microsoft-debuts-extenders-for-windows-media-center-adds-divx-a/
Ok, we're gonna break this down, Microsoft really didn't do us any favors of simplicity this time. As you may remember, back in late 2004 Microsoft's hardware partners announced Windows Media Center Extenders, which were basically STBs that could replicate a cheesy version of Media Center's interface on your TV over your home network. Not surprisingly, people didn't want another box (let alone a box with a crappy UI that wasn't as good as a real Media Center) so those boxes never took off. But the best (and most frequently used) implementation came way later on with the Xbox 360, which was able to far better replicate the XP and Vista Media Center experience.
So today Microsoft is announcing a reinvigorated Media Center Extender effort called... wait for it... Extenders for Windows Media Center. Ok, the name totally sucks, but the important part is Microsoft upgraded its wayward Extender system with a new version that takes full advantage of Vista (including live HDTV streaming), supports 802.11n, and adds something that really blew our mind: codecs we actually care about, namely XviD and DivX. Niveus, Linksys, and D-Link will all be launching new devices based on this software platform, so watch out for those -- as well as DVD players, TVs, and all manner of other home theater devices Microsoft is apparently trying to get this new system built right into. Unfortunately this new Extender rev isn't being announced for the Xbox 360 (yet), so we'll all have to wait a while longer before playing XviD and DivX movies on that thing -- without transcoding, anyway.
If they add the appropriate Xbox 360 functionality soon, that'll really value-add to the 360 for me. I've been tempted to buy a network-enabled Xvid/DivX player for a while, and will definitely be buying a 360 this holiday season for Mass Effect. The purchase may kill two birds with one stone, now.
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I don't want to always convert all my movies!
Why? The original extenders is what the Xbox 360 one is based on. As far as I can tell based on what I've read, the 360 basically has all of the features of the original extender. It's already been rumoured that the Fall Update comes with a lot of the new extender features, before the new extenders were announced. While it could just be wishful thinking and coincidence, I think there's more evidence to believe than doubt at this stage.
And let's be clear, if they say no to the extender portion of the 360, that doesn't mean it's not coming to the streaming function that's OUTSIDE of the extender. The fact that microsoft is now allowing it means someone got a greenlight somewhere, and sure as shit we'll be getting it on the 360 soon.
I mean, even .avi support would've been nice considering it's a format created by Microsoft!
That's the understanding. As a first generation Media Centre Extender, the 360 should also reap the benefits of this second generation's new features, as it would give them even greater value-add to the 360 as a media device.
Converts formats which aren't originally supported by the 360 on the fly so you don't clog up your PC with converted DivX/XVid files and can even stream to a variety of devices etc.