The 360 is a high-def capable piece of electronics, so even if the media on your PC is 720p or higher, you can stream it. If you take photos in high-res, for example, they can look fantastic on a high-def TV screen. High-def movies that you've downloaded or created on your own translate perfectly through the 360.
There are two ways to go about sharing media with your Xbox 360, and they depend on whether or not you wish to use Media Center. If you do, that's fine; otherwise, you can share media through the standard interface (which is simpler). The difference between the two methods is this: By sharing through Media Center, you can stream recorded TV through the 360. Otherwise, you can only share formats compatible with your Xbox 360.