I have a WDTV Live and a 2TB WD MyBook attached as my main content drive. I have noticed issues with large 5GB+60FPS files not streaming properly. I have also noticed that the HD randomly freezes requiring a power cycle. I have the latest firmware and have not noted any mentions of similar issues on the WD forums.
I've had similar problems. At first I blamed my wireless connection and so I hardwired it over CAT6 (gigabit router) and still had problems so I put the file on a thumbdrive and it still didn't work right.
I think the problem is the player... maybe the small Atom Processor doesn't have enough juice to run these types of files.
Thank you all for commenting. I will try the thumb drive option with a few different file types. Does anyone recommend an alternate media player? Perhaps a encoder similar to Handbrake to convert media files to something within the WDTV spec?