Yeah I was trying to avoid transcoding. In fact I didnt even want to convert my ripped DVDs to DIVX, so I just converted the VOB files to MPG so they are just the original MPEG2 streams right off the DVD.

So as for what you mention about streaming to xbox without the MC interface, yes, this is called Windows Media Connect, and I don't know how you could like that more than MC except as you say, for the fact of streaming music while you play.

It is nothing more than a crappy folder structure, which makes management a nightmare once you have LOTS of data shared out to it. I can do things like search and filter music in MC, and I get album art and some built in filtering to boot.

The real killer for using Media Connect though, is its total lack of support for MPEG2, It just won't even show an MPEG 2 file in a shared out folder when you go into videos in media connect on the 360. However media center on the 360 will stream both DIVX and MPEG2 just fine.

Also as far as I know (and I could be wrong on this) the 360 doesn't just see "open" (I think you are meaning shared) libraries on your network. It will see whatever you have shared out from WMP11 running over a service called "Windows Media Player Network Sharing Service". I have never had my xbox (in media center or media connect) just found media on my network that I had not explicitly told it to look for.