As you may have guessed already, I’m in love with my Xbox Media Center (XBMC). It’s a great media center for watching downloaded content. But even-though it’s pushing out a 1080i picture, the adage holds: Garbage in, garbage out. Although in this case, it’s more like recycling.
Most of the TV you can download out there are 350MB per half hour, multi-pass encoded in the Xvid codec. They look great, they sound great, but they don’t match the high-definition coming through the air or cable company. Even though they may be labelled “.hdtv.avi”, they have been encoded down from a high-definition MPEG2 down to an MPEG4. If you look at the true HD rips floating around out there, they are 4GB per hour. So despite Xvid being a great codec, picture information is being lost.
Here’s a look at the same scene, from the same show (’Lost’), on the XBMC vs. a Scientific Atlanta HD-PVR. Both screenshots were taken from a paused screen at almost the same timecode (you try pausing within a millisecond 
) with a Canon Powershot SD30 on a Sharp Aquos 32″ HD LCD TV.
Xvid on XBMC
HD TV on Scientific Atlanta PVR
As you can see, there is a fairly big difference. This is a pause, so you can’t see the motion effects. But differences in clarity and colour are pretty easy to see.
The sharpness just isn’t there in the Xvid. Look at the details of the woman’s face, and the stairs behind her. The Xvid is blurry whereas the HD has the clarity you have come to expect on a modern TV.
Also, check out the buttons on the woman’s jacket. In the HD you can see they are all gold/bronze, whereas the Xvid shades them each very differently (some even look green).
Although the Xbox Media Center is great for streaming downloaded (Xvid) videos to your TV, if you are used to high-definition television, you can’t get rid of your cable company or HD-tuner quite yet
This looks to be more of a resolution issue then anything else.