This is a great unit that plays many sorts of video formats including divx/avi, h.264/mkv. It will play DVD ISO and VOB files, but it does NOT use the DVD menu system. There have been many requests in WD's forums to add this feature.

It also plays many audio formats. You can rip a DTS CD to WAV files, and it will properly send the digital output to your amplifier.

I have two of these and they play everything I've thrown at them.

I got the first gen one at Bestbuy two weeks ago for $60, and my only regret is that I only bought one.

HDMI makes the movies look great. I've converted my entire collection of DVD's onto my USB harddrive using CloneDVD.

can you install xbmc on this?

Amazing device.. Love mine for playing movies and music. Great quality and fast access.