Thanks
I stumbled across this last night and finally got things working. You're exactly right though, that's all it took. I also wasn't aware that a MXC1 user account was created under Docs and Settings and that on the 360 it had already mapped those folders.
Related question though... For music, I added it in a similar fashion and it took a long time and went through every single subfolder in my PC music directory, adding it to the library. I assume that if I go now and add news songs/folders under my "Music" folder that I added on the 360, it will automatically show those folders?
I assume it was just slow to add music because it was looking for album artwork and song details? Whereas for videos and pics it seemed faster. I guess there were also less subfolders too for videos/pics, since iTunes makes a subfolder for every artist and then for every album below that...