Hey so recently ive been getting into machinima and want to start making some and i don't want to do it with low quality, I was wondering if we could extract the files using xplorer or something and convert them into wma or mp4s via our computers. Im sure you could. If anyone knows about this please let me know cause i can't find much machinima help anywhere.

The H3 films are not video at all. Its a set of instructions that are sent to the game engine to render.
The only way to get them is to do a video capture on the output from the console.

That sucks.
Theres no way to emulate and recapture on your computer?

well unless you have the halo 3 engine running on your PC, then no. like stated, you will need to use a video capture device