Ok so the anime Bleach is now shown in HD...so the subbers at Dattebayo decided to throw H.264 in an AVI format. But I use my old modded xbox to view all my movie files. As some of you know the old xbox doesnt have the necessary processing power to play H.264 coded files. The only thing I like about the HD codec is that it looks flawless on an HD TV. Now the only way I was gonna watch my bleach on my xbox again is to convert that H.264-AVI file to just a Divx-AVI file. My question is....is there anyway to get that good of a resolution with a Divx codec so it would be able to play on my ol' modded xbox running XBMC?

XBMC(make sure you have one of the latest versions) can handle H.264. The problem is with XBOX's hardware, low RAM and weak CPU.
It all depends on the settings(resolution/bitrate) that were used to encode the video. All the videos that I encoded myself using H.264(with FairUse Wizard) play fine on my XBOX.Check here for some similar discussion

http://forums.macrumors.com/showthread.php?t=320438

http://www.xboxmediacenter.com/wiki/inde...and_resolutions

So, you can FTP the video to your XBOX and see if it works, or load the video in Gspot and check the video specs.

which xbmc build do you have? Does it work for you. And im not really asking to run an H.264 vid on XBMC. I want to convert it to a similiar resolution and quality but in a Divx or Xvid format.

I have the last version of XBMC that was released in April 20 I think. My H.264 videos play just fine.

http://t3ch.yi.se/

If you convert to Divx, you will lose some quality. There is no way around it, you lose quality with each recompression. Might be not noticeable, depends on your video source quality.
Try Alltoavi or Winnydows.

http://www.winnydows.com/news.php

I'm using that exact same build. But do you have any special settings on your video? Mine lags every so often, and they are being ran off the hd on the xbox. And yours run perfect?

The resolution and/or bitrate for your video might be a bit too high.