The issue is most likely related to the DSM and not MC12. As far as I know MC12 transcodes audio files but not video files and the DSM is notorious for video file issues. As much as I hate switching between programs, I run Tversity on my HTPC for only streaming video files to my two DSM-320s. Audio and Picture files are better left to MC12. I know this is not the best answer but it has been the best workaround for my files until I am able to replace those DSMs with real HTPCs. However, as they are in the garage and the kids playroom (2 and 4 years old), I am in no hurry to replace them.