I wanted to add my desire for this feature. A lot of media archives you might deal with is packaged into RAR, and for those using NAS, or such, it’s a PITA to unrar. The “wife & kids” user case just want to browse to a directory and click play.
Note, playback of media files is a bit limiting even under XBMC, as you are limited to what is in the I/O buffer for seeking, but it does work. Added note: I found it actually worked XBMC playback of RARed media archives was best with xbmsp (ccxstream) over SMB or AFP.
You’d need to make sure that the UI allows for more explicit “go to X minutes”, even if there are no chapter markers or it would be very, very painful.