I've tried this before and I get some error message on my Xbox. I set up my iMac to share its connection via wireless and set my iBook to share its wireless connection over ethernet to my Xbox. But it doesn't work and says something about not being able to get through or something (its been awhile).

Perian (perian.org) works really well. It's a Quicktime plugin that allows it to play all kinds of files like .flv, AVI, etc. I think it's just Mac only.

@BigBowlOfCereal: