Yes, I have an XBox, not the fancy new 360, but an old one. A long time ago I had a chip built in to allow me to use is as a multimedia machine. I did not really use that capability, but now that my girlfriend likes to watch recorded movies I decided to give it a try again. Actually I was impressed but the power and value for money.
I am running XBox Media Center on my XBox, the open source media center. It works beautifully and I have it connected to my server as well so it can play anything. From MP3s to movies, with subtitles, no problem at all.