When I first started out on the Xbox modding project, all I had in mind was to use it as a cheap media player that plays content (i.e. video, music, photos) from my media server cum NAS (i.e. my DNS-323) on my big screen TV in the living room.
This setup has been working well for the past couple of months but recently while researching into how to get my kids' Xbox games on to the upgraded hard disk so that they no longer need to mess with physical discs anymore (let a 4 year old handle the discs and I guarantee you that you will be buying replacements in a matter of weeks), I found a new trick; There is a wonderful little program called dvd2xbox (included in an AID installation) which can rip DVDs, audio CDs and Xbox games onto the local hard disk or even across the network (e.g. to my NAS!) via samba. Its extremely user-friendly (everything is just a few clicks away) and it will even look up freecddb to auto name your audio tracks!
So now, in addition to solving my "kids with discs" problem, I also have a painlessly way to quickly and effortlessly rip my audio CD and movie DVD collection right in the comfort of my living room! Excellent!