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#21
Here is the solution that worked.
The xbox and the MCE machine can communicate and 'see' each other fine when they are out of the domain.
As soon as the MCE machine joins the domain then it stops 'connecting'. Xbox seems to cycle through ready and unavailable and never quite gets to load MCE.
Because MS is using a big piece of Remote Desktop to drive this, and because the xbox (and other extenders) don't have a big operating system, there is quite a bit of stuff that happens in the Link layer.
Short story is there is a problem with the Network Mapping and Responder modules.
Because Network Mapping can be a hungry process, especially in a larger network,Windows 7 has been changed so that the default, when in a network, is to switch these off.
To switch back on -
'Run' gpedit.msc to open the Local Group Policy Editor.(The Local Group Policy Editor is available on computers running the Professional, Enterprise, or Ultimate edition of Windows 7.These are also the only editions that can join a domain.)
Navigate to Computer Configuration\Administrative Templates\Network\Link-Layer Topology Discovery.
Double-click the Mapper I/O Driver policy.
Select Enabled, and then select Allow Operation While In Domain.
Click Next.
Repeat the selections for the Responder Driver policy setting, and then click OK.
By the way, you would do the same to get full network mapping to work in Network & Sharing Center.
Also, this solution can be 'tested' by reversing the fix and viola, problem's back.