I think the problem is the SMB/CIFS file system. If you use something like a UPnP/DLNA server to stream your movies from I bet you have much better results. As well, look at the benchmarks performed on a WDTV here:
http://wdtvforum.com/main/index.php?topic=5393.0
There are very cool screenshots showing the performance of various protocols used when transferring data to the WDTV.
In summary, running an NFS client on the WDTV the person was able to hit 70Mbits/sec of data transfer, but using SMB/CIFS they were only able to get 20 or so Mbits/sec of data transfer. Of course, the WDTV doesn’t support NFS natively, so that isn’t an option. I think the only way to get high bitrate files working is with a UPnP server.
