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Hi8 video capture, got MPEG, want to view thru xbox360

Have transferred family movies on Hi8 cassettes to the PC using Pinnacle Dazzle video creator.
We want to be able to view them thru the Xbox 360.

The files captured are MPEG and won't even list in the 360
Also re-encoded them to AVI using pinnacle's own software but the codec is not supported on the 360.

Are there any programs out there that will re-encode them to DivX so we can view the files thru the 360?

BTW the 360 is already set up for streaming from the PC.

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