PROBLEM SOLVED I TOO HAVE BEEN TRYING TO PLAY .AVI FILES ON 360 BUT KEPT GETTING THE "MEDIA UPDATE REQUIRED" MESSAGE.HAVE NOT GOT XBOX LIVE SO WAS SCREWED.WENT IN ARGOS TODAY GOT A 4GB SANDISC STICK - £5.99 BARGAIN!!! - WENT ON http://support.xbox.com/en-GB/xbox-360/system-updates/system-updates-info DOWNLOAD SYSTEM UPDATE ONTO PC,UNZIP - COPY UNZIPPED FILES ONTO ROOT DIRECTORY OF USB STICK SLAP STICK INTO 360,WAIT FOR RESTART CONSOLE AND UPDATE MSG. ET-VOILA!!! I NOW HAVE SHEDLOADS OF AVI FILES I TRANSFERED OFF MY PC ONTO STICK AND PLAY THEM ON 360 PIECE OF PISS Copy to a USB flash drive If you cannot connect your Xbox 360 console to the Internet, you can copy the console update from your computer to a USB flash drive and then install it on the console. Note The USB flash drive must use the FAT32 file system. Plug your USB flash drive into a USB port on your computer. Download the update file. Click Save to save the console update .zip file on your computer. Unzip the file. If you are using Windows XP, Windows Vista or Windows 7, double-click the .zip file to unzip it. Copy the contents of the .zip file to the root directory of your flash drive. Unplug the USB flash drive from your computer. Plug the flash drive into a USB port on your Xbox 360 console. Restart the console. When the console restarts, the installation program starts automatically. Select Yes when you are prompted to update the new console software.