Prep Your PC
To get your PC and your Xbox 360 to communicate, you'll need to install Windows Media Center on your computer. If you have Vista Home Premium or Ultimate, you already have it. But if you're using XP, you may need to download it. You can download the program straight from Microsoft. Once you have done that, you'll need to sync your Windows Media Center software to your 360.
You can do this by going to Media section your Xbox 360, and then selecting Windows Media Center. You'll then be presented with instructions on the screen to which you Xbox 360 is attached. Most of this process is automated, but you will need to perform actions on both your console and your PC as the on-screen instructions dictate. There will be a point where you'll be given a code on the screen to which your 360 is attached, and you'll need to enter this code into your PC. Once that is completed, your PC and your Xbox 360 should be synced, and you're ready to play your content. You can do this buy using the Windows Media Center feature on your Xbox 360 console. Windows Media Center will communicate with the software on your PC. Remember when doing this that you can only play content that the Windows Media Center installation on your PC knows of. If you have files which you have not loaded into your Windows Media Center library, you won't be able to play them.
Alternatively, you can simply sync Windows Media Player 11 and your Xbox 360. Once you have Windows Media Player 11 installed, go to the library tab, then go to Media Sharing. Click on Share My Media, which will bring up any devices you can share with. Your Xbox 360 should show up, so select it, and click Allow. Once you've done this, you can go Music, Pictures, or Video areas of your Xbox 360, which will bring up a menu allowing you to select your PC. Once you've done so, you can start picking out what you'd like to play. This process is largely the same for both XP and Vista computers.
Of the two, I would recommend using the full Windows Media Center connection. The interface it is much better overall, and provides a smoother experience.