I too have the same problem and through many pages of forums i have sifted to find nil solutions which resolved it.
I have however now found a solution, it works on my machine and i hopefully it works on yours, as now media streams perfectly to my xbox360 with no hangs or dissconnects.
If you open up your Task Manager and go to the processes tab and look for a iTunes process, cant remember it name off the top of my head but it will be there even if itunes isnt running. Anyway close all the iTunes processes and retry your xbox media centre.
Since then i have ditched iTunes and uninstalled if completely from my machine and out of the reg. Was always a clumsy program anyway..... opinions?? nooo, i better not open that bucket of worms... lol
Anyway worked fine for me, Good luck to y'all.