I had a similar issue after upgrading to fw 1.06, however, solved the issue by:
1. Restored the 323 to factory defaults (remember - this also resets the password to nothing - so login as admin and no password after reset).
2. Now create a new "movie" directory - copy all your old movies from any other directories (DO NOT USE YOUR OLD share folder for movies - it must be a new one - or it will not work)
3. Set the folder in the "UPnP AV Server" admin configuration screen - click refresh - and it will then appear in XBOX360 under Your Videos as the DNS-323 device.
So, that's how it worked for me. Although, having reset the factory defaults, I found XBOX360 could see my DNS-323 but, like you found, there was nothing being displayed - despite having refreshed the 323. It wasn't until I created the NEW directory, copied some movies into it, set the folder and refreshed, that they suddenly appeared in the XBOX360.
My latest issue is that XBOX360 is having difficulty actually streaming certain movies from the 323 (but will quite happily pick up the same movie from a local shared folder on my PC ... hmmmm?) ... but that's another issue and another story. Best of luck..