Windows 7 comes with many new under the hood enhancements that address some sore spots for Media Center fans, but we don't think any hurt as much as the lack of native codec support. The most popular file format online today is without a doubt MKV, but many don't understand that it isn't a codec at all, but instead a container. In fact it's a container that can hold just about any combination of video and audio, but most notably H.264 video and AC3 audio. Now the kicker in Windows 7 is that although it natively supports H.264 and AC3, it still can't play MKV files. Up until now enthusiasts have been installing the Haali splitter on the Windows 7 Beta, which has kinda worked. We say kinda, because for whatever reason the Haali Media Splitter exposes the H.264 stream in an MKV file as AVC1 and not H.264. What this means is that Windows doesn't realize it can decode the content natively and when you try to play one of these files on an Extender -- for example -- the video is unnecessarily transcoded. So now that you understand the problem, it appears DivX has the solution. The latest DivX Tech Preview features a Media Foundation -- the replacement for DirectShow in 7 -- component that will demux MKV files and allow the video and audio streams to be decoded with native Windows 7 codecs. Well, that's the theory anyways, we'll be following the comments closely to see how this turns out in practice.

Whoa, we may need to slow down on the celebration over out of the box h.264 codec support in Windows 7, with reports from developers indicating the beta OS blocks the usage of third party decoders under Windows Media Player and Media Center. Of course, the included codec support would obviate third party installs for many users anyway, and until we get an official release candidate we can't be sure how things will stack up in the retail experience. Digitalwerks has run down the sources, noting that third party solutions like VLC and Media Player Classic could still serve as workarounds, but Media Center Extender heads will want to keep a close eye on things going forward.