you can do this with a modded original xbox as well.
I can stream 24bit flac, 16bit flac, mp3, xvid, divx, etc...just about any video/audio file you can throw at it. You can also find digital hookups for it on ebay. Last year I was running optical audio and compenent video out of the box...this year I can't because our tv is junky.
the xbox really is the ultimate media machine.