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Originally Posted by Damion Chaplin
I guess I don't understand though; why would one prefer this method rather than playing the DVD with the 360 in the first place?
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Three posibilities, all specialized and small niches:
1- Centralized storage with multi-point viewing; a household with many viewers that might want to watch different things (or even the same things) at many locations (living room, den, bedrooms) either at the same time or different times
2- Management of *large* DVD collections gets cumbersome and since the studios frown on (read:sue over) DVD silos that stream... <shrug>
3- Protection of originals - Kids like to watch favorite movies or TV episodes repeatedly; streamed files are easier to find and don't get damaged or get jam or peanut butter into the DVD drive like even copied DVDs do.
Like I said, all these are very small niches and even those would disappear if the studios allowed for online video subscription libraries for true on-demand. But until the studios change their business model, there is a (limited) use for this kind of approach.
That said, if *I* were doing something like this, I would go one step further and transcode the mpeg2 file to high-quality VC-1. Less drive space needed and, from my experience, the copy has a *better* video quality that the original. Counter-intuitive and all, not sure why, but the effect is real.