Is it possible to "render" (think its the word) Flash and videos like Divx etc on the local machine? so you dont get the lines (they happen quite quick because its connected by ethernet but still annoying) as the screen refreshes down.
As I understood it, X-Windows worked this way. The local machine with the keyboard and monitor was the "Server" of said resources, and the remote machine with the big cpu and storage space was the "Client", sending rendering info to the "Server" to be rendered.
This model proved unpopular, as evidenced by the rise of Citrix and Remote Desktop.
You might try Go-to-my-pc. If anyone would have worked out how to split rendering from other tasks, I think Citrix may have done it.
The whole point of Remote Desktop is that you are using the remote machine as if you were sitting at it - so you use it's network connection etc.
There are problems with graphic intensive operations including video and 3D graphics as the rendering is done in software rather than using any hardware acceleration on the local machine. The connection has no direct access to your machine so it can't use the local hardware for rendering.
It does seem odd that you are watching videos via a remote desktop connection. What are you trying to achieve?
EDIT There appear a number of pages on how to watch BBC iPlayer videos on the XBox:
Though a quick scan would indicate that they're detailing the same solution