I agree. Streaming network content to the xbox 360 is the easiest media centre I have ever had the pleasure to work with. I also happen to be one of the lucky ones who has bought 2 xbox 360s and never had either of them RROD in 2.5 years.
While the media centre offerings on XP can be a hassle to set up - Vista is only slightly less time consuming - the Win 7 setup is by far the easiest and fastest, even compared with 3rd party options like TVersity. With the appropriate codecs installed, simply add the folder to the Videos libraries and in Media Player click "Stream -> More streaming options...". Give permission for the 360 to access your PCs media library, wait for Media Player to index the files, then navigate to the video library on the 360. A list of network devices with media streaming capabilities will appear after a few seconds and simply follow the folder structure to access the file you want to watch.
While it doesn't allow you to stream internet media, the Netflix service is available for U.S. residents. TVersity will also allow you to subscribe to internet video feeds if local network content is not enough. I am using my desktop PC and a WD My Book World NAS (which natively supports media streaming via PVConnect [TwonkyMedia] and automatically shows up under the xbox video library device list) to download and feed all my music and video, respectively. Any sufficient network should be able to support all types of media, even using the xbox wireless adapter (802.11g) has enough bandwidth to stream 720p HDTV x264 content without waiting to buffer.
For my needs, this setup fits perfectly. Obviously OzPeter has a much narrow focus for what he wants to do but if others have similar requirements as myself then I can't recommend this enough. I never thought we would see the day when a Microsoft product would "just work" but kudos to them for coming this far.