the only

I've found with a similar set-up is that although I can play my archive of ripped DVDs on the MCE (they are ones I own, just like to run them from the Maxtor to avoid fingerprints!) I've yet to find a really good, seamless (7yo-friendly) solution to get them delivered to the Xbox360.
Transcode-360 and TVersity do very good jobs but you lose a lot of the DVD goodness.
But for watching TV and WMV encoded content the solution rocks