If all you did was recode your WTV files to MP4 without changing the video codec, the 2 XS will not play them. WTV records the video in whatever codec is used in your location, which for North America is MPEG-2. No Roku older than the fifth generation supports MPEG-2 video, and even some of that generation might not. The oldest player I know that supports MPEG-2 is the Ultra 4640.
Windows Media Services offers very little transcoding, and zero control over what little it does. Also, the 2 XS has a bitrate limit of around 14 Mbps. This is enough for ripped DVD, but not Blu Rays. I just checked some recorded HD TV shows and they are reporting average bitrates of 12.8 Mbps and peaks of 80 Mbps
. Even a movie recorded from a 720p broadcast (PBS station) shows an average of 10.2 and max of 19.4 Mbps. So recorded HD TV shows of movies might be a problem with your 2 XS. I know, as the 2 XS was the original Roku player I started with.
In short, you have two issues: Windows Media Services is a terrible DLNA video source, and your 2 XS is a really, really old and outdated player. If you don't need the Ethernet connection, a brand new Premiere is $30 or less on sale. It supports 4K, MPEG-2 video, and is so much more powerful and faster than the 2 XS you wouldn't believe it. For your media source, I suggest one of the available DLNA servers you can install on a Windows computer. I am partial to Serviio, as I authored the Roku profiles for the developer. But Plex or Emby are both good options, and both offer dedicated Roku apps/channels that might offer you a better user experience than Roku Media Player. Myself, I am quite happy with RMP, but some people prefer something closer to a Netflix style control app. All three that I mentioned offer free, no-cost versions, and all three offer a paid version with additional features. But the free versions likely will do anything you want on your home network.