Vista 5536 : Video Thumbnailling and MCE / 360

With build 5536, under media centre with media centre extender on my 360,
selecting optimisation always results in the 360 being disconnected and
apparently no optimisation taking place.

How do I turn off showing my video files as thumbnails? I have a large
library with various avi and mkv container format video files. The
performance of thumbnailling these within media centre either locally on
vista or on the 360 is horrid. I do not see a user option for that within
settings.

Along with horrid performance, some of my XVID mpeg4-asp encoded avi files
media centre claims it cant play it, complaining about the codec. However if
a user selects the file directly within windows explorer instead of media
centre it plays fine.

Despite having a matroska container splitter (haali media splitter) and an
avc codec (coreavc) none of my mkv / avc encoded files will actually
thumbnail.