Dutch site Xlife.nl were invited to a training sessions for shop employees, and managed to get quite a spicy rumor.
It's been possible for a while now to play DivX movies on the Xbox 360, but so far it involved using converter codecs taking a DivX original and converting it to WMV on the fly on a MCE PC.
"After the event I had a short talk with the host and asked him whether there'd ever be support for DivX and Xvid playback. Much to my surprise he started telling me that Microsoft is working hard to implement this and a firmware update is expected within 2 months allowing you to play DivX and Xvid directly on the 360."
