I think it can if you are good at networking and use some external apps to help set it up. But it won't just work out of the box with the pro version of xp (i don't have the media center extender).
However, if you want to mod your xbox (chips can be found for about $20, vs MS's $80 media extender), there is a free program that is actually better than that extender. I think MS took the idea of putting this program onto the xbox from the old user made "xbox media player", which is done with and remade with the new name "xbox media center" (xbmc).
here is the site, there are pics there too. With skins, you won't know the difference.
Screenshots
skins to change the look (page 4 has the ms skin)
Anyways, if you want to know more about the xbox app that will work on xp pro, home, linux, mac, etc... then just post in the xbox forum asking about "xbox media center". I have it and use it. It's not only better than what MS offers, but is also free
edit: oh, and the user made version can also play and record shoutcast streams from the net.