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I too recommend using CDRW. Although I managed to watch a divx movie via cdr and managed to rip some (some work some don't - same brand) burned trance CD's on xbox its not really recommended to use CDR, for instance my divx cd doesnt work anymore on xbox and it suddenly also has quite some scratches.
I don't know what brands are the best, also with DVDR's it seems the Xbox is picky.
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