Can i use an external HHD to play video on Xbox360

Hi, i keep reading different opinions on this subject, can some please help me clarify this.

Can i use my external hard drive plugged into my xbox360 via the usb port to play supported video files, i've read it has to be formatted in Fat32 but some people say you can while others say you can't.

I can plug in my usb flash drive and view pictures but i tried putting an mkv video file on the usb drive and it doesn't show up on my xbox360, even though all other files do.

If some one could please clear this up for me, can i or can i not plug in an external usb hard drive to watch video's on my xbox360, thank you for any help or advice.