Thanks for the reply scorpNZ, to answer a few of your questions:
1. The reason i use streaming is because my laptop is upstairs on the second floor connected to its monitor and a pair of decent but ultimately cheap computer speakers. The Xbox 360 is downstairs hooked up to the main TV in the house as well as a receiver with much nicer stereo speakers, naturally music sounds better from this and i like the idea of being able to listen to the same library of music both up and downstairs without having to buy any additional equipment, hence the media streaming.
2. The mp3's are not being played off the 360s storage device because i have too many (roughly about 260gb of music) :) Also i update my music library regularly so having to copy new songs from my computer to the 360 would just be a huge hassle! It would also seem like a waste of space having duplicate songs to me when streaming actually works fine as i've said with the Zune software. It just doesnt organize the files correctly :P
3. No options in either the 360 or Zune software settings to fix the issue :(
I've also tried hooking my iPod up to the 360 via USB and it has the same problem, doesnt read the disc # tag so The Beatles White Album would show up with this track order: Back in the U.S.S.R., Birthday, Dear Prudence, Yer Blues, Glass Onion, Mother Nature's Son, etc.
The only "solution" ive found has been from the Zune software to make a playlist containing the correct track list and that works, but having to do that for every multidisc album i have kind of negates the purpose of being able to search by album and artist on the console, and i would have a TON of playlists to wade through lol
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