I was just wondering if anyone knew of a way where I wouldn't have to be connected to LIVE to play x264 (mp4) files. When connected to LIVE I have no problem whatsoever with it, but if I turn the console off and disconnect from my network, it gives me the "does not support this content" error. Why does the codec not stay on the console once downloaded? It drives me crazy. Streaming isn't an option for me at the moment, so any help would be greatly appreciated.
I'm assuming you're connecting your hardrive to your pc, since you state that you're trying to do this with your console off. So try searching for cache files (or something similar).
Like when watching a online video in youtube, metacafe, etc. You don't notice that you download the video, but you can obtain it from your cache files.
If this info doesn't help, then I'm sorry, look up a picture of a monkey and start punching it in the face.
Have you replaced your console since originally downloading the optional media update? Maybe a RROD replacement from MS? If you have, that's why it's happening, as the media update is protected by the same DRM used to protect XBLA games and other content.
To fix it, delete the media update from your storage device. Create a new, free Xbox Live Silver account, log into it, then try and play a file that requires the update. You'll be prompted to download it, and from then on it'll work online and offline.
For some reason, if you use the same gamertag to download it that you originally used, it doesn't work, which is why you have to create a new one. You can delete the gamertag when you're done.