Eastlands, I have the same issue,
I encoded my DVD collection with Magic DVD ripper. They are AVI with Xvid codecs. Media center does not like them as I do not have any codec for it but that is not a concern as I only want to watch in my living roon via my DMA2200.
What happend for me is the video takes about 20-40 seconds to start, no audio and then about 5 minutes into the movie it gets choppy video.
I upgraded the firmaware to 1.16, have a 100 meg direct network connection. MP3's play fine. I trid the 4cc changer, no go for me. I am ripping a video in wmv right now to try.
I guess a better question for me what format works, love to have the video in native DVD format and had the ff and Rew work, no trascoding at the extener.
Sorry for the long winded fist post...really new to Media center...
m.