Instructions
Sign in to Xbox LIVE and replay the video you attempted to play. Once you are connected to the Internet, you will be prompted to download the update for the video codec. Make sure that you're signed in to Xbox LIVE using the original profile that downloaded the video content.
Ensure that the PC you are streaming video from has media sharing enabled under the "Stream" tab while in Windows Media Player.
Check that the licenses of the video content you're streaming are up to date.
Use WMV, MPEG4, H.264, or AVI formats for content streamed from USB and Windows Media Player 11; WMV, MPEG4, and H.264 for content streamed from Zune software; WMV and AVI for content streamed through Windows Home Server; and WMV and MPEG2 for content streamed through Windows Media Center.