Such a device exists

[Lampshade]

I picked up a $50 dvd player that has hdmi out and reads DiVX/MKV with aUSB port. works great, plays lots of stuff that my xbox say's I can't. Also, you can set up an xbox as a media extender, so it plays movies from your computer. I found it too much work to scroll through them, so just use a USB for most, or plug in the laptop to my TV.