Instructions
Ensure you have the latest software by navigating to the XBOX Live website and connecting your XBOX to the site. Select "System Settings," which can be found in the "My XBOX" section of the dashboard.
Select "Network Settings" and choose your method of connecting to the Internet. If you use a wired network with an Ethernet cable, select "Wired Network." If you are using a wireless connection, select the name of your wireless device.
Navigate to the the "Test XBOX Live Connection" and select "Yes" if you are prompted to update your software. With this new update, your XBOX console will be able to play DivX and Xvid files without any conversions.