1080p .mkv issues on x360

ive had SD and 720p .mkv files work fine...when i try and stream a 1080p i get the mce error saying the correct codec is not installed. can anybody help with this?

also when i open Divx

also when i open Divx connected it will say processing and gets stuck on the first 1080p movie and basically locks up...the movie plays fine in vlc and media player though