One big thing to remember is that whatever streaming software you use, you have to store your DVD sized movies on an NTFS formatted hard drive.
... or an HFS+ filesystem, etc.
FAT formatted drives have a 4GB file size limit. Almost all external hard drives are FAT drives so this applies even if you directly hook up an external drive to a PS3.
Nothing stopping one from putting whatever sort of filesystem is desired on an external drive. You're not limited to the crap that comes from the factory.
The other option is to compress your movies to less than 4GB, then it is not an issue but you lose some video quality = to the amount of compression you have to do.
Yep, it's a tradeoff. I know people who routinely rip DVD's with Handbrake for more compact storage.
