It's not setup right then... mine has been working flawless.

I highly recommend something like this to anyone. I bought a second XBox for the living room, and it's not for playing games. 90% of the use of it is playing movies(played from a network share on PC), MP3's, and internet radio. I couldn't have built a cheaper home theater PC for $160 with all the power this one has(dolby digital out and component video out).