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Well trying to transcode to xvid or divx on the fly will basically be impossible given any decent quality source file (and assuming decent output). I'm assuming you would be connecting w/ wifi to your network, in which case you should be able to just stream your larger original files as they are. (Unless you really can't use that much bandwidth?) Players like Betaplayer can do amazingly well with high quality video. I've viewed a bunch movies in xvid format from linux Samba shares just fine. However, wifi is a battery eater so there is a real tradeoff there, nothing beats having them on an SD, CF, or microdrive.
-James
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