Just got a new WD TV Live player this weekend. I was using network share option to connect to my files, but occasionally would run across a movie file that could not be found, came up with a folder is empty message. So I then decided to switch source, same PC and Share, to use connect to media server. Plex is my media server on the same computer that all my videos are on so I used it. I then could see the movie in question and play it no problems.
Plex typically does the transcoding of files then streams them out to devices such as my old roku player. Playing large bluray files would cause my media server PC to actually reboot. So I wanted to get away from this, hence I bought the WD TV Live box as it does the transcoding. I checked my media server as I watched the movie file and saw that there was no significant CPU usage by Plex.
I liked the way the files actually had the cover art work for each file while using Plex Media Server as my source, and well my PC that hosted the files did not reboot while playing this large file. So my question is this, if you use a media server as a source for your WD TV Live does it let the Media Server do the transcoding or does it actually take over and do the transcoding by itself?