The Xbox 360 Fall Dashboard Update arrived overnight, and added a long list of new functionality – although the one thing most people are interested in is the relatively unexpected arrival of DivX/XviD playback.
Sign in to Xbox Live (Silver or Gold account – doesn’t matter), and accept the update. Try and load a DivX or XviD file from a CD, USB drive or the network. Files can be played from just about anything – CDs, DVDs, USB drives, Windows Media Player 11, Windows Home Server and even Mac formatted drives. It supports a vast majority of files. You can manually switch between Letterbox, Fullscreen, Stretch and Native modes.