before i sent my 360 away to get fixed because of ROD i cud just plug my usb stick in and watch movies without that online media update bullshit. if it saves to the memory of the console - y must i still b online to watch!!!!!!!
The issue is licensing. The media update is a DRM'd piece of content like most other stuff on live. When you FIRST download it, you get 2 licenses. One for your gamertag and one for the console that first downloads it. This means that anytime you want to use the media update to watch a video, you can on that console, regardless of who is signed in because that CONSOLE has it's own license. When you get a new/replacement xbox, the console license is obviously not going to be there. This means that to play content that needs the media update, you need your gamertag license, which requires a sign in to live for verification. The solution to this problem is to get another CONSOLE license. To do this, create a new dummy silver account. Sign in. Then download the update under this new account. Because this will be the first time you download the update with this account, both a gamertag and console license will be issued. Your new xbox will now have it's own license to use the update and NO sign in will be required.