Limit Quality on XBox 360 Transcoding

I was trying to watch a video last night that is a 720p mkv. In the past my computer seemed to transcode them without issue, but last night it kept having to buffer. I was looking at my processor usage, and it doesn't seem to be maxing out even one core (according to the performance tab), but under processes, it lists ffmpeg.exe as 49-50%. Now if I remember right from beta testing the transcoding, the WMV support in ffmpeg doesn't support multiple cores, but why would the performance tab not be showing one core being maxed out?
Anyway, that isn't the real reason I am posting. I also have 1080p videos on here, but they are pretty much impossible to transcode with only one core on my computer. Is there a way to limit the resolution and/or bitrate, so that I would be able to watch these videos? Or is there any other format that the xbox supports for streaming that doesn't require the whole video file to be complete that would be able to use more cores? From what I can tell on this post it seems that the xbox can read m2tsc containers, is this at all a possibility for transcoding (it seemed the like the time to convert was extremely low).
Thanks again for all your hard work. This program is the only thing I use to watch things on my tv as I don't have cable or satellite hooked up.
Oh, and my computer is a AMD Athlon64 X2 6400+ (runs at 3.2GHz) with 4GB of DDR2 800 running Windows 7 x64 Ultimate.
Anyway, that isn't the real reason I am posting. I also have 1080p videos on here, but they are pretty much impossible to transcode with only one core on my computer. Is there a way to limit the resolution and/or bitrate, so that I would be able to watch these videos? Or is there any other format that the xbox supports for streaming that doesn't require the whole video file to be complete that would be able to use more cores? From what I can tell on this post it seems that the xbox can read m2tsc containers, is this at all a possibility for transcoding (it seemed the like the time to convert was extremely low).
Thanks again for all your hard work. This program is the only thing I use to watch things on my tv as I don't have cable or satellite hooked up.
Oh, and my computer is a AMD Athlon64 X2 6400+ (runs at 3.2GHz) with 4GB of DDR2 800 running Windows 7 x64 Ultimate.