I'm using a wired network, so the latency shouldn't be a problem.
After using the 360 a while it now seems it doesn't matter what I do in the media center extender on the 360, as long as I leave it connected to the media center pc and I don't use the remote for a while, eventually the media center extender will stop responding (after 5-15min). As posted my only way of "communicating" with the 360 at this point, without restarting it, is to press the 360-button and choosing 'dashboard'.
I'm considering reinstalling my pc with vista instead of xp, hoping that a fresh install and a new os will solve the problem.. Or just do a fresh install of xp since my pc's hardware isn't good enough for vista
But I'll wait a couple of weeks or so before doing that, hoping that someone has a tweak solution, or something similar, to the problem.