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just feel like I blew all these dollars on a HTPC and now the 360 could have done it all
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Is your desktop running XPMCE Edition or Vista Premium/Ultimate?
Don't forget that the 360 will NOT be able to access TV unless you have it connected to a HTPC ie a PC running XPMC or VistaMC, a PC with plain XP/Vista basic and a TV tuner won't work the extender interface.