Ok, we're gonna break this down, Microsoft really didn't do us any favors of simplicity this time. As you may remember, back in late 2004 Microsoft's hardware partners announced Windows Media Center Extenders, which were basically STBs that could replicate a cheesy version of Media Center's interface on your TV over your home network. Not surprisingly, people didn't want another box (let alone a box with a crappy UI that wasn't as good as a real Media Center) so those boxes never took off. But the best (and most frequently used) implementation came way later on with the Xbox 360, which was able to far better replicate the XP and Vista Media Center experience.
So today Microsoft is announcing a reinvigorated Media Center Extender effort called... wait for it... Extenders for Windows Media Center. Ok, the name totally sucks, but the important part is Microsoft upgraded its wayward Extender system with a new version that takes full advantage of Vista (including live HDTV streaming), supports 802.11n, and adds something that really blew our mind: codecs we actually care about, namely XviD and DivX. Niveus, Linksys, and D-Link will all be launching new devices based on this software platform, so watch out for those -- as well as DVD players, TVs, and all manner of other home theater devices Microsoft is apparently trying to get this new system built right into. Unfortunately this new Extender rev isn't being announced for the Xbox 360 (yet), so we'll all have to wait a while longer before playing XviD and DivX movies on that thing -- without transcoding, anyway.