The rumors (and Davis Freeberg) were right… Microsoft has confirmed next week’s Xbox 360 update will include DivX and Xvid support. However, as Chris Lanier points out, playback is limited to the Dashboard — there’ll be no media extender streaming from Vista or XP. Meaning, we’ll most likely be sneakernetting our compatible video on USB storage. Check out FAQ 10. for the inconsistent playback options.
Additional Fall Update features include Xbox Originals, enhanced online profile and friends list, plus:
several noteworthy changes in the Xbox LIVE Dashboard, from the new Game Store button to the Video Store button to enhanced visuals and descriptions in the video library
Click here for a complete listing of additions and improvements. (How come TiVo doesn’t provide a changelog like this?)