Link to Microsoft Knowledge Base:
The solution is as follows here (taken from the Microsoft Knowledgebase) – Method 1 seems useless in most home computer instances, Method 2 (the long one) solved my problems.
Verify that the computer is not joined to a domain. To determine whether Group Policy settings are causing the connection issue, temporarily remove the computer from the domain, restart the computer, and then try to add the Xbox 360 console as an Extender again.
Remove the Media Center Extender certificate. To remove the certificate, follow these steps:
- Click StartStart button, type mmc in the Start Search box, and then press ENTER.
- On the File menu, click Add/Remove Snap-in.
- Click Certificates, and then click Add.
- Select Computer account, and then click Next.
- Select Local computer, and then click Finish.
- Click OK.
- In the Navigation Pane under Console Root, expand Certificates, expand Personal, and then click Certificates.
- Right-click Microsoft Windows Media Center Extender Host, and then click Delete.
After you remove the certificate, uninstall the Extender, and then reinstall the Extender. Follow these steps:
- Start Windows Media Center.
- Click Tasks, and then click Settings.
- Click Extender, and then select the Xbox 360 console.
- Click Uninstall.
- After the uninstall process is complete, click Extender again, and then click Configure.
- When you are prompted for the setup key, follow these steps:
- On the Xbox 360 Media Remote, press the Y button.
- Press the Windows Media Center Start button.
- Note the eight-digit setup key.
- Return to the computer, and then enter the setup key.
- Complete the Extender setup.