PS3 Media Server is a video streaming and transcoding app. It allows you to stream most video files to your Playstation 3. Video game consoles have limited video format support. Although this application was designed for the PS3, I have read that the Xbox 360 seems to work with it as well.
Once you get this application set up, you should be able to see your computer on the Playstation 3 or Xbox 360 acting as a media server. You will then be able to see any files that you share using PS3 Media Server on your Playstation 3. There is great support for video and audio files, and there are features that I have been looking for for a long time. One of this features is subtitles. I used Connect 360 for a while, but it just lacks subtitle support, among other features. PS3 Media Server is able to add subtitles even to MKV files on the PS3.
PS3 Media Server should work out of the box. If it doesn't, there are a couple of guides on the official forums that should help you diagnose your problem and solve it. I didn't get it to work with my 360, maybe because of a network problem, since I was unable to ping it for starters.
The configuration is done via the app and it isn't too hard. PS3 Media Server is also available for Linux and Windows.
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