I stream media, ALL my movies and audio files from my CPU to my computer I no longer burn a thing.
There a couple of ways in which you can do this, of which I will touch base on, I would link you but the link I used I cannot remember so my inbox as well as my gamertag (xI SwAgg3r Ix) is open to any and all who would like help in this matter.
I have media Center(MC) and my 360 setup as an extender however there is no way to stream Divx as MC does not support this format. So I only use this to stream audio, and Pictures. It is also possible to record live TV from your PC but you need a digital cable box and a video card with TV IN/OUT.
First we are going to allow your PC to enable sharing and setup a home network in order to stream media from your PC to 360. Click the start tab select my control panel. Once the Control panel is open select Network and Sharing Center. Look at the options and make sure that "File Sharing" and "Media Sharing" are enabled if they are not then hit the little downward facing chevron and enable them both. Once this is complete you must enable your firewall to allow these settings as well if you are only running windows firewall then go to windows firewall, "change settings" "Exceptions" and make sure that the "Windows Media Player 11 Network Sharing Device" is checked. If you are running a different Firewall then do the same in it and allow WMP11 Network Sharing.
Now all you have to do is connect your 360 and PC. Open Media player 11 click "library" then look for "Media Sharing" and select. Your 360 should have a yield option on it as it should be detected click the xbox icon and hit "Allow" then hit "Apply" and then "OK". You have now successfully enabled Media player 11 to share its it content.
Next we are going to setup your "Network"(Pc and Xbox hooked up to the same router) to locate your computer.
Start up your Xbox go to the dashboard. Find the "my xbox" tab and pick the third option to the right which should be"Video Library" click it. You should now Have four option which include Downloaded videos, Current disc, Portable device, and "Find PC" (or something to that nature, it may even have your PC already detected if you have tried this in the past. mine says "ROFL-PC-ROFL" as that is the name I gave my PC.) Click it and it should immediately start searching for your PC,you are now fully able to watch anything in the shared directory you have preset in your windows media player.
**EDIT ** Forgot that once your 360 finds your PC you will NOT be able to play any pirated Media, All you have to do in order to do so is select from the shared folder ANY media that is NOT AUTHENTIC and Xbox will immediately prompt you to download a patch. The patch is tiny and takes less than 3 minutes (mine took 30 seconds). As soon as that is downloaded ANY Media will be allowed to play on your 360.
I hope this little TUT helps. If you have any questions or concerns please do not hesitate to PM me or send me a friend request on LIVE(xI SwAgg3r Ix) and I will be more than happy to walk you through it personally.

