Xbox 360 using Media Center refuses to play Xvid .avi files

I have a Xbox 360 that I am using as a video extender to view the video files on Usb drive and a hardwired Lan pc hard drive from long time without any issues. But if I am trying to set up a video server with Vista OS then I can get the videos to play on the computer via the Media Center but via the Xbox running Media Center then I am getting an error message that syas the file is in the wrong format? The video files are xvid into .avi file format which the Xbox sees and I have already shared the drive and folders on the server. So, can anyone recommend why the files are not able to play through the Xbox? Thanks

I dont think that the Xvid files will play through the Media Center Extender, they will be only able to play through the dashboard's video player. Also, the Media Center Extender is not having the same video codec support as the dashboard's video player, am afraid.

You can use something like Transcode 360 which is a tool that can be installed on the PC and transcode videos on the fly to MPEG2 format that is incompatible to play on your Xbox 360 (Transcode 360 also works with other Extenders). The interface integrates with Windows Media Center to play a video with Transcode, simply select your Xbox and press the INFO button on your remote control to select the playback in the Transcode menu.