Iphone

I recently upgraded my Media Player computer to Windows Vista Ultimate Edition. When I attempt to play MPEG2 video clips through my Xbox 360 I get the following error:

Video Error
Files needed to display video are not installed or not working correctly. Please restart Windows Media Center or restart the computer.

I restarted the machine, and my Xbox 360 and the problem still persists. Prior to upgrading from MCE 2005 I had no problem playing MPEG2 videos. What the heck is going on here?

I checked out the support videos files here, and MPEG2 is one of them.
Windows Vista: Windows Media Center Extender FAQ

I know that the system will play WMV files, but that would mean I would have to convert everything to that particular format.

Iphone

Are the MPEG files you are trying to play compressed via DIVX? If so, they will not play on the 360... this is Microsoft covering their butt's from the MPAA and the torrenting of movies. MPEG files that are not compressed with DIVX will play on the 360 just fine. On a side note, if you buy the HD-DVD player for the sytem the firmware update for the 360 allows you to view just above every video format other then DIVX on the 360... I can even stream .MOV (Quicktime) files to my 360 now from my computer. The 360 could easily support the DIVX codec but again, Microsoft is appeasing the movie studios by not supporting it... especially since Xbox Live now offers digital move downloads.