Hi,
I tried to follow the problems BiNaiRiX posted, but they seem to have been related to a fairly obscure Zysel device. The WD TV Live series is more common in the US anyway and since I have all the versions, I can tell you I have no problem streaming almost any format of video. The only one I am not sure about are .iso's and dvd / .ifo's as I long ago used HANDBRAKE to convert / compress all of my DVD collection. If you want to upgrade your firmware, you have to go with 2.02. v2.02 fixes the alpha-numeric order problem present in 2.00. There as still some bugs in the the 2.02 media streamer and you may need to do a manual "refresh all" especially when adding a large number of files to the 320, which can take several hours. By the way, if you do decide to update, you should plan on manually redoing / re-saving all of your settings and configuration even if it "looks like" the setting are there.
i cannot speak to the Web File Server as I don't use it. Good luck.