There could be several reasons for that! I presume you're streaming over a wireless connection... in which case 802.11g may not be sufficient and you would instead need a wi-fi router that supports 802.11n. Otherwise, have you tried the "keep original format" for all the transcoding options?
FYI - If you have Windows Vista, you won't need Nero MediaHome to stream a WMV movie to your XBox, because the Windows Connect media server is integrated into the Windows Media Player 11 under Vista.
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