I've only done a quick test, but I have a bunch of my daughter's DVDs ripped (to VIDEO_TS folders with the VOB and IFO files). No problem picking the toplevel IFO file and everything is fine. I hope soon to test wired network streaming.
Chalk me up as another one VERY disappointed with the internal fan. It's surprisingly not air noise or turbulence that's the problem, but rather the buzzing noise that the fan emits that is audible above all other noise, unless the sound is turned up beyond where we'd normally have it set. And yes, I've checked that nothing is obstructing the fan blades; I ran it with the case open, it seems to just be a (very bad) 'feature' of the selected fan. It's a problem because I'd hoped to pop in a 5400rpm laptop drive that I've had hanging around, but for now due to the noise I've unplugged the fan.
Can anyone confirm if they've gotten a USB DVD (or Blu-Ray or HD-DVD) drive to be recognized by the PBO?