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[SickJoda]

"A lot of people have been asking about the media playback and streaming functionality in the Xbox 360. Jason Dunn over at Digital Media Thoughts  was recently over at MS’s campus being given a tour of Windows Vista, and managed to get some hands on time with the Xbox 360.

The big deal for me was the built-in Media Center Extender software - with the current generation Xbox, you need to put in a special CD to have the Xbox connect to your MCE 2005 computer, and the end-user experience was pretty horrible because it was essentially a special remote desktop client running. This meant you didn’t get any of the smooth transitions, there was a lag with every button press, and it generally wasn’t great. It was impressive as a proof of concept, but I for one wanted more and the Xbox 360 delivers: because it has a full client built in, you get a first-class experience when using the Xbox 360 as a Media Center Extender. Rapid response to buttons and selection movement, fast responses to changing screens, and direct TV viewing (including HD content) are all supported.

A common question I’ve seen in our forums is how the Xbox deals with media. There’s a 20GB hard drive on board that can be used for ripping CDs - there’s a CD ripping client (I didn’t see it though) that will connect to the ‘Net and download track names - my assumption is that it will only rip to WMA and at a certain bit rate. The Xbox 360 will also have the ability to play photos and videos (WMV only I think) from external devices, so you can hook up your Zen Micro and play music off of it, and someone mentioned you could connect a USB thumb drive with videos and it would work. I don’t know if you’ll be able to copy over videos and photos from external sources - the Xbox 360 seems to be largely focused on being a conduit for content coming from another computer. On the plus side, however, you’ll be able to install the Windows Media Connect software on any PC you have in the home, and the Xbox 360 will be able to access it."

-360hacker.net