The fall 360 update brought with it the ability to stream video from XP to the 360 (via media player 11 or media connect.) Yes you can only stream video in .wmv format, but that is not the end of the world as I will explain.
Prior to this update you could only stream video from a computer running MCE. Also it would only stream mpeg2 and wmv. Many people don't like this solution since they don't have an MCE machine, and much of their library is in Divx / Xvid format. As for MCE, it is not that hard to build your own since MCE 2005 supports general hardware and the OS is pretty easy to get (most new computers come with it pre-installed now anyway). I converted my DVR / HTPC over to MCE last spring and I haven't looked back. The ability to watch live TV, recorded shows, and schedule future recordings all from the 360 is amazing. This is all cool but the real deal maker for me was finding a solution for my Divx / Xvid library. No one wants to run through their collection and convert everything to WMV. It turns out that there are several solutions out there. They work by plugging into MCE and transcoding the video into a format that the 360 understands. Yes transcoding is not very elegant, yes it degrades the quality slightly. But it works and very well I might add. It allows me to browse and watch any video in my library from my couch with the 360 remote. The best part is that it allowed me to move my noisy HTPC out of the living room and back into the home office where it belongs. The solution I am using is transcode360. It transcodes almost anything the MCE box can play to mpeg2 for streaming to the 360. It transcodes a little faster than real time, so you can start skipping ahead after you have watched for a few minutes. It also cleans up the temporary video files when you are done. So far it has managed to play almost every Divx file I have thrown at it.
So how does all this relate to XP? Well since the release of the fall update, the community has been scrambling for a similar transcoding solution for XP. One of the first ones out that door is TVersity. TVersisty is a media server that supports UPnP AV / DLNA standards for streaming content to a variety of devices - including the 360. This provides similar functionality to the MCE / transcoding solution without MCE. Additionally it supports other UPnp devices such as the DLink DSM 320. You also get the bonus of being able to stream podcasts, internet music and internet photo feeds (Flickr etc) direct to the 360. The down side is that the browsing playback interface on the 360 is not as nice as the MCE solution. I have not tried it yet, but I hear it presents you with a flat file scheme.
This approach to streaming from XP may only a temporary solution for most however, as Vista includes MCE functionality built in. I expect the transcoding community to launch a wave of updates / improvements when Vista is released. <fanboy> Add to this the potential to download movies and TV shows directly to the 360, (not to mention awesome games) and you truly have one box to rule them all. Or at least to rule your TV. </fanboy>