I tranferred the music from a CD onto my Xbox as my DVD player wont play CDR's and i wanted to listen to the music through my main speakers, not the laptop.
I guess it works with normal CD's too. If you play the CD you can see just on the left hand side of the track listing a rounded box with the 'usual' Windows Visualisations in it. To make this full screen you do the Y and X buttons.
I'm not sure if you can change the visualisations but last night i had the music from Rez playing, thumping my sub into next door, with the visualisations on a 40" RPTV......was a bit trippy to say the least!
I have not tried it when playing games yet but i reckon Soul Calibur II with that music would be an experience indeed
I find the Visualisations from PS1 i think yeah it was, on a seperate disc you load in and then your music CD, it had the best reaction visuals to the beats and rhythms - shapes change and react accordingly, most impressive.