If a media-player (e.g. mp3, wma, divx, vcd, avi...) is created for the xbox, then chances are it will be installed to the harddisk then run either automatically by the xbox when the relevant media is inserted (not sure how this would be done...)
or it will have the bulk of the program installed to HD and the rest on a swap disc to be run before the media disc.
current results out on the scene use a .xbe file on the disk with the media.
hopefully this won't be needed on every disc, and also, if you're trying to play your VCDs, chances are thoses CDRs aren't gonna work with the shitty xbox DVDROM anyway!!!