From gizmodo.com:
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* DivX and WMV play back fine. Just as they claimed, the PS3 now can play back DivX files and WMV files. No problemo.
Some readers are reporting that XviD support works. Others have written us saying that some files work, others don't.
Update: We've found that XviD playback does work, but only on burned DVDs and external hard drives.

* Streaming only works off of Windows Media Player 11 shares, not Windows Media Connect or SMB (regular Windows folder sharing). This one could be a biggie. The PlayStation 3 doesn't actually support SMB network shares, which is the default Windows folder sharing network protocol that both Linux and OS X understand. This means you're going to have to install Windows Media Player 11 (or something similar, like Orb) in order to stream video from your home computer. Windows Media Connect, which sits on our Windows Home Server that housed most of our video files, didn't work. WMP11 did.

* The quality is pretty good. When we got the network streaming to work and found a compatible DivX file out of all our XviDs, playback was smooth and (for the most part) artifact free.

* Video dimensions stretch well. The PS3 knows exactly what aspect ratio your files are and stretches them to fit your screen without distortion. The 360 couldn't quite handle that without a little coaxing.
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Full Story: gizmodo.com

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