Finally someone who has the same problem as me. Ive posted a few pages about this before but noone responded.
DMK11 did you use the IMDB feature with your divx movies, and then after that the problems started up. At least for me i could play divx fine in the "my videos" section, but after i loaded the imdb information about a movie it would give me that error and freeze the xbox. I can now only play the movies through the file explorer, which isnt bad, just a different route.