Let me try and tackle your questions one at a time.
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I am talking about universal compatibility and streaming from my pc without using tversity etc?
Yes the PlayOn!HD can stream directly from shared drives/directories on your network without a hitch. I run XP Pro on one machine, and XP MCE on another; the PlayOn!HD found my shares without me doing anything. It can also see UPnP devices. When you run something like TVersity or MediaMall's Playon software, it shows up as a UPnP device.
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It would be nice if internet /online is possible too lol.
Okay, not a question, but just for clarity, the PlayOn!HD can stream online radio as a built-in feature of the current firmware. My limited experience is that it does this very well.
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Build quality seems very good.
Build quality seems okay; not as good as the WDTV in my opinion. I do NOT like the plastic case, and the power button on the front seems VERY flimsy.
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I have 2.5 inch 160GB SATA drive that is right now FAT32, should I format it to NTFS before installing?
If you're talking about installing the drive as an internal, then "no." Remove your data off the drive (if you need it), and let the PlayOn!HD format the drive. I'm pretty sure it formats the drive with the ext3 file system. I don't know for sure, but regardless--if it's an internal, let the streamer format it. If you're using an external just plug it in via USB and see if it can read it.
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Can I dload stuff onto this hard drive from my pc, after being installed into the player , wired/or wireless connection?
Yes, the box has built-in ability to copy/move files from the LAN or USB drives, to the Internal Drive. It can probably move files from any attached devices, actually. I've only tried moving files from the LAN to the Internal Drive. I copied two 700mb files minutes after I got the box running; the transfer time was only around 10 minutes or so. A faster option is to use the PlayOn!HD's USB slave port and hook the streamer right up to your computer,although I haven't personally done this yet. If you're interested, the player also has the ability to create & name directories, delete files, etc.
I have no experience trying the device wirelessly. From what I can tell, if you use a wireless USB dongle, it will need to have a Realtek chipset. But again, I haven't experimented with that at all.