Xbox 360 USB Hard Drives

[elrasho]

Heres the plan, get an 500GB external USB hard drive and connect it to my PC and copy all my movies and MP3s to it.

Then connect this to the 360 and play the movies and MP3s through that. Is this possible? Can xbox play DivX, Xvid and AVI files?

 

[elrasho]

Ive just tried an AVI file and it works

Does anyone else do this on a regular basis? Are there any implications I should know about?