I have a NAS drive and have set up media sharing on it to stream vids to my xbox. My xbox sees the NAS fine, and can see my video folders, but when i open the folders it is telling me no videos found.

Strangely before i had the NAS drive i used to stream them from my PCs HD using WMP Media Sharing and it worked fine.

I can view photos from my NAS drive so i dont think its to do with the EXT3 format.

Anyone have any idea why the 360 wont see the divx files on the drive?

I'm not sure if this answers your questions but here is what I'm dealing with. I just set up a ReadyNasDuo in my house. The 360 would not find any of the video files I had. I originally put them in the Video folder that was on my nas. I then moved them into another folder called Vids and I can now see them???? I'm not sure why this is. The folder is in the same media directory on my nas. I found this out by just taking certain folders inside the main Video folder and coping them to the main directory. They would then show up.

It does seem to take FOREVER to update the folders. Hopefully this helps you too. If I come up with any better explanations I'll post it.