Hi, I was recently having the same problem but found a fix hidden deep within
the XBox360 Forums:

I'm using Vista Ultimate (x64) and Media Centre Extender used to work fine.
Then my XBox360 died and was replaced.

After the new one came back, I was getting the Media Extender not recognised
problem and was no longer able to connect - even though the X360 could 'see'
my PC. It kept asking me for a driver CD, which I knew was wrong.

I've also had the same problem recently with USB devices not being
recognised..even simple memory sticks and memory cards through my card
reader. The soultion I've used immediately fixed both problems and is
ridicluously simple.

1) Navigate to your Windows\Inf folder on the hard drive.
2) Find the file 'infcache.1' (something has modified it, and that's what's
causing the issue...mine had somehow been modified to all upper-case)
3) Ensure you have permissions to move the file (Administrator grant access
to 'System/Users')
4) Move the file to your desktop (or wherever it suits)
5) Restart the computer (the infcache.1 file is re-built automatically)
6) Follow the normal steps for adding the Media Center Extender (simply
switch on the X360 once your PC is booted and the Wireless/Wired Network is
running) including the 8 digit code during the process
7) Marvel at your now working again Media Center Extender

Hope this helps.

"Vexir" wrote:

> I have called Microsoft several times about this issue but they could not
> provide a fix, so I was hoping you guys could help me out.
>
> I have a PC with Windows Vista Home Premium loaded on it, which is supposed
> to be compatible with Xbox 360 and is supposed to be able to use the Xbox 360
> as a Media Center Extender device. The trouble is that the computer does not
> recognize the 360 as an extender device (DESPITE being able to see it on the
> network) and the xbox is not able to see the computer as a media center pc.
>
> When I go through the Add Extender wizard in Media Center, the wizard stops
> and errors when trying to locate the Extender and says An Extender Could Not
> Be found. This is strange. I know it is not my router that is causing the
> problem because i do have another computer with Windows Vista Ultimate
> running on it and it detects the 360 as an extender and the 360 detects it as
> a media center pc.
>
> Here is the question:
>
> How do I make my Windows Vista Home Premium PC recognize the Xbox 360 as
> a Media Center Extender/Device? How do I make the Xbox detect the PC as a
> media center pc?
>
> Here are the known facts:
>
>
> 1. The router is not the problem.
> 2. Another Windows Vista PC (ultimate) is able to connect to the Xbox 360.
> 3. The Home Premium machine cannot detect the 360 as a Media Center Extender.
> 4. The Xbox 360 cannot detect the Home Premium machine as a Media Center
> Computer.
> 5. The 'Add Extender' wizard in Windows Media Center automatically will
> configure Windows settings (including sharing and firewall) to operate with a
> Media Center Extender.
>