After you install the subject update, in addition to the connection failure, the Xbox 360 reports Cannot Find Media Center PC, and when you try to use features you receive Media Center Extender Error - An error occurred while using your Media Center Extender. To continue, reset you device. For more information about resetting your Extender refer to your hardware documentation.

This behavior occurs because Windows Media Center Extenders, like the Xbox 360, use network ports to communicate with computers that are running Microsoft Windows XP Media Center Edition 2005. The Rollup Update for Windows XP Media Center Edition 2005 contains updates to Media Center programs that may have been previously configured as approved or allowed by a non-Microsoft firewall.

You should try to manually update your non-Microsoft firewall to allow or Approve the new program version to access the ports. See Xbox 360: Firewall ports that you must open when you connect an Xbox 360 console to a Windows Media Center-based computer.

NOTE: See How can I set up a firewall to work together with a Windows Media Center computer.