If you've never heard about it before... once your Xbox is modded, jump right in to Xbox Media Center. It also launches games, and displays them as icons, but they can't say that for legal purposes...
LINK
It does just about everything. Here's a short description from the site... There's much more detailed info on the site, so check it out.
The XboxMediaCenter Project:
XboxMediaCenter is a free open source (GPL) multimedia player for the Xbox™ from Microsoft. Currently XboxMediaCenter can be used to play/view most common video/audio/picture formats such as MPEG-1/2/4, DivX, XviD, MP3, AAC, JPG, GIF plus many more less known formats directly from a CD/DVD in Xbox DVD-ROM drive or of Xbox hard-drive, XBMC can also stream files from a PC over a local network and even stream media streams directly from the internet. XBMC has playlist and slideshow functions, a weather forecast and many audio visualizations. All these features enable the Xbox™ running XboxMediaCenter to fully function as a multimedia jukebox. XBMC is easy to install and use, it's very convenient and flexible plus offers a great price/performance ratio. XBMC is of also course completely free of any adware or spyware. (This, The XboxMediaCenter Project is also known as "Xbox Media Center" or simply "XBMC").
