I have a ps3 in my living room and a 360 in my bedroom (I use both for meadia extenders as well). What file format will work so I can stream my backup brd movies back in hd and possibly 5.1 on both systems? I really don't want to convert one movie for one system and then again for the other system.
With the 360, you'll have to download a codecpack in order to play more advanced/varied videos. Once that's done, then yes, I believe both will play most DivX/Xvid/raw/other-encoded AVI files.
I haven't watched too many videos on my 360 (it's just a lot easier on the PS3), but I'm sure it'd do much the same job as the PS3, and support the same formats. It might have issues with different types of audio, though.
If there's one thing that I KNOW the 360 sucks at, it's DVD playback and upscaling. If you're using the component cables that come with it (or any component cables, for that matter), you won't be able to upscale the video - it'll stay at 480p. I think it has something to do with a patent issue with component cables or something.
Anyway, the DVD playback is horrible, too, even when on a regular TV. Many people have done tests that have shown that the 360 plays DVDs horribly.
...but that's ignoring the point of the thread. Yeah, .avi is your best bet, but if they're HD files, you might have a bit of a problem. (The Xbox 360 can't play h264 HD files, so it might not play HD avi files, either.)