here's what i did and it worked once but i can't get it to work again. I use both Quicktime Pro and Connect360. I loaded the .mkv into Quicktime pro then followed this guide:

However the xbox still wouldn't play the mp4, i just got a black screen. So i decided to save it as .mov. i then found out that the xbox360 won't play anything over 4 GB so i just trimmed the end credits off of the .mov and ended up with a 3.95 HD .mov that i could stream with Connect360. there was no quality loss at all and if there was it wasn't noticeable. But now i've tried the same thing with another .mkv file and it won't work. it seems that this is not consistent. Both files even have the same format (AAC stereo, 48 khz, H.264)
the only thing that is different is that the one that works is 1280x544 and the one that doesn't is 1280x688. but that shouldn't matter should it? Does anyone know why this could not be working? it's really bugging me!