Transcoding?

Thanks Milan, but isn't this the point of contention.  Plex thinks it's direct play from the activity log and yet the transcoder is running?  Also, these files play fine on the Xbox system video player, with Plex as the DLNA server, where no transcoding takes place?

I'm looking at it right now, but when played by DLNA - no transcoder.exe, but played via Plex it's there and hammers the CPU.  Yet in both scenarios Plex activity shows direct play.

This sounds odd to me.  Why is there a difference?

Exactly, the transcoder.exe process does not run on the Plex server when using the DLNA client on Xbox 360 to view video, but always appears to run when using the Plex client on Xbox 360 to view video.