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Another solution (I use this one today) is to install WMP 11 on the Windows Home Server (google it). You then disable the built-in WHS media sharing and enable WMP11 sharing.
There are a few additional registry keys you have to create to get MP4 support working (again, google is your friend) but once you do this, it works flawlessly.
I have about 2 TB of video on my WHS and play it all through 360s attached to every TV in the house. It works great and even the wife plays movies this way and as a side benefit, the DVDs are all in a box in the basement.
I have hopes that Microsoft fixes UPnP support in an upcoming version of WHS. As it is, the old Windows Media Connect that it is based on is not up to snuff.
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