"We spent some time talking to Microsoft about Media Centre and X360. We've got good news, and even better news if you are planning to upgrade to VISTA. Currently, X360 will run a Media Centre enviroment and, while this will need you to install some special PC tools on your Media Centre, setup is simple.

The difference from it being a normal Media Centre is that the X360 uses some of its processing power to render the Media Centre Screens - so it feels as if you are actually using a Media Centre.

The biggest news which we have heard is that when Windows Vista ships it will be Media Centre enabled as standard. This will also be able to talk to X360 and the enviroment will change.

If you wish to play a DVD via the Media Centre you can not stream this - it is only avaliable over the LAN, you can only do this with a local disk.

One other downfall is that the Media Centre Extender can not play anything bar WMV9 encoded video, even if you do install the DIVX codecs on your main Media Centre system." [more]