DivX and XviD video on Xbox 360: Its now possible to stream DivX and XviD to Xbox 360 from a PC or from the DVD or external memory devices. Apparently this has been tested and works just fine. Here’s how to get this working:

1. Sign in to a profile, and attempt to view a .AVI file in DivX or XviD.
2 . It will ask you to download content for this file format.
3. MANUALLY download it, even if the download is checked.
4. Try again, you should have success! There should be an option to continue with viewing, something like that, chose that option; it should play.

So this is great news, finally the Xbox 360 has DivX and XviD support!