If you have a Media Center and an Xbox 360, then you may want to try these two applications. I have not tested either of these applications, so the standard “it’s not my fault if they screw up your set-up” disclaimers apply.
Web Browser on your Xbox 360:
Well, sort of. Check out this Media Center app, the MCE Browser. Using windows MCE and your 360 as the extender, you can now browse the web using your Xbox 360.
(bonus points for the photo on that web page)
This application allows you to transcode video directly over to your 360. To quote the web page “Designed for Windows XP Media Center Edition 2005 and the Xbox 360, Transcode 360 aims to broaden the support for a wide range of video media including DivX and XviD.”
Have fun 🙂