Quality can be controlled via the GUI. By increasing the target resolution you can even get an HD video. Of-course your computer needs to be fast enough to handle it. On the fly transcoding from standard defintion divx to standard definition WMV is achievable on a 2.8Ghz - 3.Ghz machines.
On-the-fly video transcoding for Xbox 360
Nov 25th 2006 2:09AM (Joystiq)