As I had the exact same thing happen to me as this fellow -- and I do mean exact, down to firing up two controllers -- a direct quote will suffice:
So, the thing that prompted this rant was a simple common place trip to the kitchen. I wanted to pause the video so I could visit the kitchen. We had been watching for a while, probably 45 minutes. The full movie had not yet downloaded, only the first hour or so. The stock Microsoft Bluetooth wireless controller had gone to sleep so I pressed and held the Big Xbox button. All four quadrants blinked, then the top left quadrant blinked to indicate it was the first controller. This is when I pressed the blue X button and chose Pause. The video froze, but the audio kept going. It was completely unresponsive to any controller input. I fired up the other controller which came up as controller #2 and it was unresponsive to that as well. Nothing but the frozen image on the screen and the continuing audio. I reset the console, which was when I discovered that I couldn't fast forward to where I left off.(http://blog.0xb.org/2007/05/why-must-i-write-this-post-xbox-video.html)Update: I discovered that once the download completed I could fast forward at will. So, the fast forwarding issue doesn't seem to be some draconian measure from the studio as I thought.
At this point, I'm waiting for The Fountain to finish downloading so I can hopefully continue to actually fucking watch it. From the point where I left off, that is. The first 30 minutes is almost as exciting the second time through; I can't wait for the last 2/3 of the movie! Oh bugger...I have to wait!
Update:It's happened to me twice more. The problem appears to be with the on-screen overlay coming up, as even when it doesn't freeze, the video staggers quite a bit. Absurd that this didn't come up during QA testing, or that it hasn't been patched yet. The freeze is bad enough, but the inability to jump ahead until the whole movie is downloaded is completely ridiculous.
Worst user manual translation ever. PDF, 555KB. I hope you're wearing your adult diapers, as the Engrish is top-notch, incontinence-inducing material.
Now accepting suggestions for retitling this post. Entries must be verbatim excerpts from the manual.