Thanks to Chris Lynch for helping to refine the MKV to WMV conversion method. His original thread from xbox-scene.com can be found here.

Click here to download the guide by Chris Lynch in PDF format.

This guide demonstrates a very polished method of converting MKV files into WMV-HD video files with 5.1 audio surround sound, using Windows XP or Windows Vista. This guide accomodates multiple types of audio sources (AC3, DTS, etc), where older conversion methods failed in the past.

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Background from previous article…

The Xbox 360 was officially released by Microsoft on May 12, 2005, as a 7th generation gaming console, and network ready media center extender. The hardware capabilities of the Xbox 360 make it the best high definition video player on the market for its price. However, the software limitations imposed upon that hardware by Microsoft leave much to be desired by users hoping to to consolidate their living room multimedia equipment into one box. Originally, the biggest fall back of those limitations is by far the lacking support for any digital video file support other than WMV. The majority of internet available digital video content is not in WMV format.

Recent updates via Xbox live have enabled support for .avi and .divx files. However, the current popular format for internet digital high definition video content is Matroska video (MKV). MKV container files include x264 HD video content (720p, 1080i, and 1080p), along with 5.1 AC3 or DTS audio. The Xbox 360’s software limitations prevent it from being able to display MKV HD video files. MKV playback is not natively supported on the Xbox 360.