While the XBox360 can be used as a media player, it can only stream Windows Media files. So in that regard, a modded original Xbox running the XBMC software is still the best solution out there if you want to have a media player that can play plenty of file formats, and watch those media on your TV.
However, I just found out a software that can perhaps make the XBox360 play more file formats. Granted that some transcoding may be required, it could be a possible solution. The software is called TVersity and it is FREE. Some amount of testing and tweaking is probably required as you need to install some codecs to gain certain file support. Great software nevertheless.
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