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"Currently getting 3rd party codecs like DivX and Xvid working within Windows Media Center has worked well enough with 3rd party solutions, but the next best thing is native support. We'd already gotten the official word that H.264 support was included in Windows 7, but a tipster has lead us to believe that the pre-beta version of Windows 7 also includes native support for DivX. In addition, MKV is also expected to be supported; but that isn't the best part. Because although we've always been able to add these codecs to Media Center anyways, the real crux has been when you try to watch the very same content on an extender -- like the Xbox 360. So in an attempt to bring the entire Media Center experience to the extenders it appears Microsoft has added native transcoding. So now if Media Center can play the file, it can also convert it on the fly to a format that your extender supports. Of course like all betas, there's no guarantee these features will make it into the final build, but we sure hope they do."^^<http://www.w3.org/2001/XMLSchema#string>
<http://www.engadget.com/2008/11/05/windows-7-to-natively-support-divx-and-transcoding/>