I recently purchased a Windows Media Center Extender for my XBOX so I could use the power of my Windows XP Media Center Edition 2005 PC on my big TV in my family room. I opened up the package, installed the software on the PC, put the batteries in the remote, and put the Media Center disk into my XBOX eagerly awaiting to start playing with my new toy.  After I went through the initial setup with entering the setup id from the TV screen into the setup program on my PC, I sat there gazing at the colorful Media Center Connecting/Contacting screen on my TV.  After about one minute passed, the Media Center home screen just flash for a fraction of a second and then I would be shown a connection error message.

This puzzled me greatly as I just was using XBOX live earlier in the day and knew that my network was working just fine.  I was just about to go dig up my old crossover cable to connect my XBOX directly to my PC when I decided to search for the the error in Microsoft's Knowledge Base first.  To my surprise, the connection error was caused by a software conflict on my computer. It turns out that Microsoft's Anti-Spyware Beta application appears to be Anti-XBOX Extender friendly. 

After reading Microsoft Knowledge base article 892374, I was told that the only way to get the XBOX Extender to work was to disable Microsoft's Anti-Spyware Beta application.

For those of you that are experiencing the same problem I had and are running Microsoft Anti-Spyware, just right click on the Anti-Spyware icon in the system tray (the target looking icon by the clock) and select Shutdown Microsoft Anti-Spyware.

Once I did that my XBOX Extender worked perfectly.  I was a little disappointed with the way two Microsoft products conflicted with each other, but then again Microsoft Anti-Spyware is still in beta so I hope that the Anti-Spyware team at Microsoft gets this fixed soon.  I like my XBOX Extender, but I also like to be Spyware free.

Make sure to restart Microsoft Anti-Spyware with the shortcut in the Start Menu after you are done using your Media Center Extender or replace it with a different spyware application to keep your computer protected.

If you do not have Microsoft Anti-Spyware installed on your Media Center PC but are still having connection problems, follow the tips below:

• Currently, the XBOX Media Center will only work with Microsoft Windows XP Media Center Edition 2005.  If you have any other version of Media Center you are out of luck.
• Check all of the physical cable connections between your PC, router, and XBOX. Make sure the green connection lights are on, on the back of your PC, XBOX, and router/switch/hub.
• Make sure that you can access the Internet on your Media Center PC (this will test to make sure the IP configuration is correct)
• Check to make sure your XBOX has an IP address on your home network.  If the IP address on the connection error screen starts with 169, then your XBOX is not getting an IP address from your router.
• If you are running any software firewall on your Media Center PC, disable it temporarily and test your Extender again. (MCE needs ports XX open for use).
• If you are still having problems, try reinstalling the Media Center Extender software on your Media Center PC.  Make sure you enter the correct device setup ID that is shown on the TV screen when you first use your Extender during the end of the setup process of the software on your Media Center PC.