A few details I don’t remember seeing spelled out before seem worth emphasizing, since people who convert videos so they stream without transcoding need to know what to do:
[list]Q: What features of MPEG-4 Advanced Simple Profile does the Xbox 360 console support?
A: The Xbox 360 console supports bidirectional frames (BVOPs), interlaced frames, quarter pixel motion compensation, global motion compensation, and MPEG quantization.
Q: Does the Xbox 360 console display embedded artwork for MPEG-4 Part 2 or H.264 files?
A: Yes. You can embed artwork smaller than 400 KB in the video files.
Q: What types of AVI files are supported?
A: The Xbox 360 console supports files encoded using MPEG-4 Part 2, Simple Profile and Advanced Simple Profile. These files often are referred to as Xvid or DivX video files. Many common DVD authoring tools, cameras, and camcorders can encode files using MPEG-4. Some files authored for DivX devices also may contain additional functionality (menus, subtitles, multiple audio tracks, and so on). The Xbox 360 console attempts to play these files but doesn’t support any additional functionality. In some cases, it can’t play the file.
Q: Does the Xbox 360 console support 5.1 channel AAC?
A: No. Only 2-channel AAC is supported. If you want to play a 5.1-channel video on your Xbox 360 console, you will need to encode it to WMV with WMAPro 5.1 audio.