It has just been confirmed, that Microsoft is currently working with Divx, Inc. to bring the popular Divx MPEG-4 video format to the Xbox 360. However, Microsoft also said that this Divx project for Xbox 360 is currently not in their high priority list. Right now, an unmodded Xbox 360 can only support video formats such as : WMV, HD WMV, H.264 and non Divx MPEG-4.
Kevin Hell, Divx, Inc.'s CEO said that Microsoft has more restrictions and requirements surrounding any software that runs on it's Xbox 360 than Sony with it's Playstation 3, so the Xbox 360 Divx project is on a lot slower pace compared to it's Playstation 3 brother.
Hell also said that with the latest 2.00 firmware update, the Divx video format support has already been partially implemented on Playstation 3, and the full Divx support will come with the next Playstation 3 firmware update. However on Xbox 360, the release date for the Divx support is still unknown.