Actually it does support x264, I have been converting my dvd's to x264 mp4 with handbreak, and it works great. Please note that the 360 has a set of specs you need to follow; the audio has to be AAC 2 channel (I tried 5 channel hoping, but it didn't like it), The video needs to be in a mp4 container (I think this is the most common) Additionally there are some bit rate specs as (I haven't had any issues with that) Also for your reading pleasure look up x264 on wikipedia, you will find that it is just the free version of the h264 codec.
“An engineer explained to us that hundreds of ear impressions were gathered in the name of research, and while each one obviously boasted its own unique shape and size, one single characteristic remained uniform across the board: the entrance into the ear canal is not a perfect circle, it's an oval.”
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Actually it does support x264, I have been converting my dvd's to x264 mp4 with handbreak, and it works great.
Please note that the 360 has a set of specs you need to follow; the audio has to be AAC 2 channel (I tried 5 channel hoping, but it didn't like it),
The video needs to be in a mp4 container (I think this is the most common)
Additionally there are some bit rate specs as (I haven't had any issues with that)
Also for your reading pleasure look up x264 on wikipedia, you will find that it is just the free version of the h264 codec.