You can either set up Windows Media Player to share your audio and video files to your 360, or any other media streaming service. If you're having trouble with the WMP streaming, try Tversity. It's a great media streaming solution for the 360 (and other devices like the PS3). You can find an article on setting it up for your 360 here.

With this you don't need to worry about formats. It will transcode anything that the 360 doesn't natively accept. It plays my ogg music and xvid video files without issue.