the first custom functionality i built was to work with Zipped images. i never store loose images. takes forever to copy 1000 loose files, but store them in a single zip file and its quick. that gets back the functionality that i'd written for MCE here : /mceZipPicWpf ... but now uses UPnP instead of MCE. what's great about this solution, is that in theory, it adds zip file support to all MediaRenderers (e.g. PS3 and UPnP pictures frames).
it would be simple to add support for Image URLs and RSS Feeds, but Tversity already supports that fine, so i'll leave that alone. it would also be simple to dynamically generate some images, for pseudo browsing, so that i could put a fake item up called Weather.jpg. when you request that image, it could retrieve the weather (with some pre-configured zip) and generate an image to return to the 360. cant believe the 360 still doesnt have a web browser. they've even got the chat pad for input. plus the internet exists!