After you select the directory and it scans, make sure you manually click the Refresh button on the UPNP AV server. The Xbox360 uses a different index list on the DNS-323 and sometimes has issues with updating automatically.
This did the trick...ty.
I ran a test between my 360 and NAS video library. This is what I found.
My video library contains about 160 movies, when trying to access the folder with those movies, the 360 would throw the message 'no videos found". I created a new folder, dropped in one movie and did a refresh on the NAS as recommended, 360 found the video.
So from there I started moving chunks of movies to the new folder, about 10 at a time, hitting refresh on the NAS, then checking the 360 to see if it updated. This was working, 360 was updating and movies where showing up. As I continued to move chunks, refreshing NAS and verifiying 360 was updating, I ran into the "no videos found" arounf the time the new folder had around 150 movies in it. It seems that the 360 has a timer on how long it will take to find the videos, about 5 seconds, and if it cannot populate the list within that time, it throws the message "no videos found". An interesting design by M$.
Anywho, the way I worked around this was to create folders, 0-9, A, B, C, etc and then putting the movies in the folders based on the name, so this reduced the list that 360 had to populate within the "5 seconds".
Sucks I had to do it this way, folders within folders ruins the flow of browsing my movies, but at least now the 360 can populate and show all my movies. Now what to do when folder A has more than 150 movies, idk..i'll cross that bridge when I get there.
Now, to get the 360 to actually play the movies is another story..bottom line, I hate M$ and the way they place limits on a product I paid for but at least I can see my movies now.