I've been delving into the media center capabilities, lately- just playing stuff from hdd, actually...not so much streaming over a network.
I have resigned to the notion that the chances of playing every format under the sun is going to inherently be hit'n'miss (the pc world manages to do it, but in reality, this situation is a real mess for the novice who just wants their video to play). So I anticipate just the basic formats will play (mpg, mp4, newer wmv, some asf), and everything else (avi, very old wmv, mov, 3gp) , I plan to transcode into straight mpeg-4/aac in an mp4 container. It has really exposed me to an exciting challenge of learning all the settings that will make a working encode, and all the stuff that goes on behind the scenes. Google/psp videos seem to be play fine.
Right now, I have been playing around with freeware MediaCoder (which is not w/o some bugginess, but is surprisingly versatile). The most important thing I've discovered is that the ps3 media player seems to prefer the audio to be in stream 0 and video in stream 1. This is a setting you need to make/verify when you configure the "container" of the file (essentially, make the audio "first"). Otherwise, you will get a silent video or a black screen with audio.
On points 1,2,4, I do not know. On point 3, I have not seen much fussiness. It's seems to be all good with mp3 and aac. The one thing I did come across is that it does not seem to recognize "3gp" style aac audio. "Regular" aac is fine. Video/audio shot with your cellphone (3gp) might not work.
Mastering the file system seems to be a big step to optimizing your ps3 experience. You have to throw away the traditional notion of putting things in "folders". The key to making it all work is making use of the file descriptions, and everything else will fall into place quite cleverly. For instance, when you import your mp3's, it is best if the artist/album/genre fields already filled out. You can fill them in on the ps3, but things can get pretty hairy if you import a bunch of stuff at once. Once you got that down, you can sort stuff handily into the ps3 version of "folders", based on what is in those data fields. The real trick is using the "album" field as the identifier for what you would use as a custom folder. If you put "my car stuff", for example, as the album field for a group of files you want to keep together, then sort your collection by album, it will essentially show you a "my car stuff" folder. You should get the point on how to use that for myraid other uses, thereon...