Ive been doing this for a while now & watching 720 or 1080p HD movies using your 360, if you have a HDTv is great fun.

Ive been downloading all oldies likes Terminator2, goodfellas, casino , etc in HD & watchingem again with super quality..

Here's what you need.

a good torrent site to getem from (like piratebay (http://thepiratebay.org/))
a program that re-packs mkv files & convert the audios to 2channel so they can be playable on your 360. The video isnt touched! (for this you should use gotsent (http://www.digital-digest.com/software/GOTSent.html) , version b5 works better for me then b6.)

now you can either burnem on a blank DVD-r & playem on your 360 or stream them to your 360 using windows media player 11 or Tversity (http://tversity.com/) which is my choice :) remember to turn transcode option off in tevrsity for best performance.

anything else you guys wonder about 360, modding it or latest firmware, Im ready to answer :)

oh ...after repacking your mkv files, gotsent makes mp4 for you. rename them to .avi for 360 to find them.

also repacked movies that are bigger then 4gig should be splitted up cuz 360 has limitations on playing 4gig+ mkv files. most 720p movies fit fine on 4gig. (gotsent has a split option for this)

If you download a HD wmv you dont need to touch anything, your 350 will play them, 5,1 audio ch works fine also.