I have nearly 500 DVD titles (don't get to the movies much anymore). Given the fragle nature of DVDs and the inquisitive nature of children (mine included) I have tried a number of DVD jukebox options. Every DVD jukebox solution I've tried involved real problems, either in cataloging, distributing, or just being reliable.
Accordingly, I have created a 3TB raid array on my home network where this content is archived in both XviD and iso forms (I switched to all iso now that XBMC has decent menu support). When I rip it, I can decide how much data to keep. Usually, I keep it all, except other languages I don't speak. When I run out of space, I will probably just get more since the $/GB cost of HD space continues to drop steadily over time. This is the perfect solution for distributing digital video throughout a home. Also, when I go on vacation with the kids, I burn backups of the movies I want to take from the network. This way, when the kids are through destroying the media (which they do) I still have the backed up content, a legit copy of which I purchased. To me, this constitues "fair use" under the copyright laws, and I should be able to get a consumer electronics product to play that content other than a HTPC. The modded Xbox with XBMC is AWESOME, but it will not handle high def content which also resides on my network. I was hoping the 360 would largly replace the original Xbox for most media streaming. Doesn't look like it will.
These are great reasons for Xbox 360 to allow real streaming of video. M$ must know that XBMC is THE killer app for Xbox and would be THE killer app for Xbox 360. The only reason I can see for the brain dead implamentation of media features in the 360 is to enable M$ to require us all to upgrade to the Next Box in 4 years which might finally provide the functionality they should be providing today.
My $0.02
PanaBax