It's all a big joke, yes.
MS's claim for not supporting Divx just doesn't hold any water. DVDs are used atleast to same extend to copy movies, and the same goes for every kind of media format out there. Yes, believe it not - even WMV.
The idea of media serving from PC to Xbox sucks hairy giant balls anyway. Having to have two highly power-hungry machines running and encoding and decoding stuff just to watch one movie makes me so angry, I'd like to find the engineer who thought of it and kick him in the face. I mean, what a waste of resources.
I'm with these guys - till MPEG4 files can be played from a self-burned DVDs, CDs, USB HDDs or transferred to x360's HDD, I won't bother spending all that time, electricity and money. $400 for the x360, $1200 to Media Center PC and $100 for the MCE and you still can't do things you'd want to do with the whole set. Sounds like humbug to me.
Pass me that $100 second hand Xbox and XBMC any day.
I'm already lining up my 2nd xbox purchase. I've been running a 1.0 since launch (way back when) but I'm getting concerned I'm playing on borrowed time now. I'd do the 2nd hand thing but I wouldn't want to take the chance on longevity. I just hold xbmc so dearly. MS will never come close because its far outside their "business model"... nothing touches it. I think I'll grab the 1.6b when they come down to $99.99 (unless my box craps out sooner) and maybe get a spider chip