Right i can comment on the quality now...
Took the default settings which are basically the quickest.
Told it my xbox was on a lan and it re-encoded at 720p (same as source)
Started it and 5 hours later I had a wmv file sat on my pc.
Checked mkv size = 1.07 GB (1,153,900,080 bytes)
Checked wmv = 950 MB (996,720,640 bytes)
Fired up my 360 accepted the new update and played the file.
Excellent quality on my 32" lcd at 1360x768. Slight pixellation on fast movement, but the quality is fine and I get 5.1 sound!
Of course I still have the option for higher quality reencodes, but I'm happy enough with the quickest option.
fyi using the tut I linked to further up in the thread took 26 hours and resulted in a stuttery video.
I have a p4 3.4 gig ht cpu with 2 gig of ram. Not state of the art, so 5 hours is perfectly acceptable as I can kick it off when I go to bed.
Those of you with dual and quad core cpu's will only have to wait a couple of hours.