I can confirm that the playback from an SMB share on a Windows XP is erratic with firmware 1.04.10. All issues reported here (stuttering, loss of audio) happened also with me. Rolling back to 1.03.49 solves these problems.
On the other hand, with firmware 1.04.10 I was able to play a Bluray ISO backup via SMB network without any stuttering. This is not possible with firmware 1.03.49. So it seems to me that WD improved ISO playback via network with firmware 1.04.10, but broke all the rest of the network playback.
I believe that firmware 1.04.10 changed the way that WDTV caches network data. It seems to be caching more data than the previous firmware versions, but it also seems it is still a buggy implementation....
Anyway, just guessing about the reasons, since the fact is that 1.04.10 is a huge regression in terms of network playback.