older Div3 files will not play. you can use a program called GSpot to see if the video was encoded with Div3. or a hex editor. i ended up writing a quick program to check the FourCC of all my vids and renamed to *.div3.avi when found. these were only my original DVD rips; quality wasnt very good, so i've just been re-ripping them. it's easy to tell when you've got a div3 on the 360, because it gives an error flyout. but sometimes i get false positives. it will give me a flyout saying the vid wont play, but if i dismiss the flyout and press play again ... then it'll play.
some of my rips try to play but the audio will stutter. the stuttering is constant and makes the video unwatchable. the problem is the audio encoding, not the video encoding. for this, i use a super program called SUPER. this lets you create a new copy of the video with a direct copy of the video stream, and a re-encode of the audio. audio encoding is fast, so it only takes about 5 minutes to fix these videos. SUPER can process a batch of files too. i haven't figured out a way to detect the stutter problem other than manually testing the vid on the 360, because the videos play without any stutter on the PC.
also ran into one file that had a bad segment. it always failed at the same point and only that point. it failed by displaying an error flyout and stopping the vid. tried numerous 'fix' tools, but they've all crashed during the process. during playback on the 360, i was able to skip past that point and finish the vid without any other problems.