[quote name='JJSP']I'm not exactly sure how on a PC, but on a Mac you can download a free program called Handbrake that'll handle encoding and whatnot - the 360 will stream .avi's and .mpg with little to no problem, so if you can get it to that, the better off you'll be.
I assume there's gotta be a similar application for PC that'd let you encode video files into different formats.[/QUOTE]
Handbreak is also on windows. Now, because the files were downloaded from iTunes, the encoding will be different, considering the files have DRM. You are going to need to find a program that can strip/encode DRMed files. This will, more than likely, cost you some $.