It has been almost a year since I last played on my Xbox, and I want to start viewing some WMV files on it through Windows Home Server. When I tried to play a WMV file it says I need a media update. According to a few websites, I need to get an Xbox live silver or gold account and download the optional media update. I did just that and did a general system update. However, after that I was still unable to play my WMV files. How can I get my Xbox 360 to download this Optional Media Update? I'm trying to play some files from http://microsoftpdc.com/Videos which looks to me in HD content.
Connect to live. Try to play a divx under video library from portable device (USB). It will give you an error code and then ask if you want to download the update and take you directly there. I did this with a modded xbox and did not get banned. Otherwise I never connect to live but this is the only way to get the optional media update
I just did this (2013), it was really easy.
Just go to the "Search Games" option where you would manually type in the game name, and instead type in the word "optional" (or really just type OPT and it auto-finishes it for you).
There's a 2008 & 2011 version of the Optional Media Update. Download the 2011 version, it is 100% completely free -- I did not need a Silver or Gold membership to download it. After that you're all set, and you can play MP4s on your 360.