For me, since I upgraded my DNS-323 to v1.06 and then did a reset to default and reactivated UPnP Media Server, I can stream all of my contents to 2 different XBOX360 that I have on the same network
both of the 360 are connected via Wireless.
All my Movies are in AVI (Divx/Xvid) or MPG (Mpeg1 or Mpeg2) and a couple of WMV.
All my Songs are in MP3 (VBR or CBR in bitrates from 64 to 192 kbps)
My Pictures are in .JPG or .BMP
The only issue I found, I beleive it related to the XBOX itself and not the 323
1. Xbox360 does not like special character in filenames or paths
2. Xbox360 does not like path and file names that are too long (over 70 char total.. in my experience)