This was all done using legit versions of XP Media Center and VMWare - If you don't own these programs, don't try this at home!
I've successfully been able to install Windows XP Media Center 2005 edition with all of the updates (rollup 2) into a VMWare emulator. The networking settings in VMWare are set to bridged and the media center boots and gets it's own unique IP address on the network.
The actual media center seems to work. It complains that the video card is not supported when I start the media center application, but this should not matter for my purpose. (The VMWare video driver does not have some of the DirectX 9 stuff to play videos that media center wants.) This is OK though because I have no intention of playing videos on the media center, I want to stream them to the XBOX.
All I'm trying to accomplish is to get my XBOX 360 to connect to the media center. I installed the application from xbox.com on the media center and everything is working good, it asks for the 8 digit key that the xbox spits out, and when I enter it, it authenticates and creates a user account on the media center for the xbox to login.
Now everything SHOULD be working fine, but when the xbox actually tries to connect, It gives an error message saying "Session Terminated" - A remote user or application reset the connection to the media center.
I can retry all day, but it always gives the same error. I can verify that the initial communicates between the xbox and the media center are going through, only when it goes to login, something resets the connection.
Does anyone have any ideas on what could be going wrong? I want to use this for development of special extentions for my media center that interact with the 360, and I don't have the budget right now to buy ANOTHER piece of hardware to run media center on.