I run a DNS323 too. Always have to go to "server" on my DSM-510 then choose video or music from there. It would be nice if they would add an "All Media" option to the Server section of the DSM-510 in a future Firmware. Like the way you can browse all files on a USB drive. -Hey it would also be nice if when redo-ing the firmware, they could dedicate one of the useless buttons (on the remote) to changing between RCA and HDMI.
For videos, from DNS-323 to DSM-510:
if you have a machine running (sorry to suggest it) Windows, get Divx from www.divx.com
DivX comes with "Divx Converter", it's drag-and-drop simple or you can customize size/res/etcetera of each Queued file. Drag videos in, hit convert, then after completed you rename all .divx to .avi extension. I have my output folder set to c:\avi and after every batch I run the command (without quotes) "rename c:\avi\*.divx *.avi" and then I move(drag) them to the DNS-323 and hit "refresh" on the media server. As long as your router isn't WiFi it should be safe to use the Windows File Sharing "Network Access" on the DNS-323.
umm, Windows XP is kind of stupid... run the above command to rename files _While_The_Folder_Window_Is_Not_Open_ or once in a while windows (explorer.exe) can get confused trying to get the stats of a file while you're renaming it and you won't be able to Rename, Move, or Delete the file in question until rebooting.
if you don't want Divx Converter to run away with your cpu you can CTRL-Alt-Del for Task Manager, find process "converter.exe" and Set Priority "Below Normal" each time you start the program. If I'm sleeping through it I don't bother.
it may sound like a lot, but it really is the simplest way I've found to convert batches of 10 or more videos at a time for the DNS323-DSM510 usage. Especially when doing 100+ per week.
also Divx Pro costs like $20 if you register but it's totally worth it. (I rarely find software programs to be worth what they cost)
when many (sometimes more than 20) files at a time need to be all the same filesize, I wrote a little AutoMate Task to ask me what size(Mb) and how many files, then rip through the Divx Converter Queue window, setting each file quickly. (AutoMate costs like $200, get the trial and decide for yourself)
http://www.networkautomation.com/automate/automate6/
also also: I don't think Divx Converter will do DVD's straight from the disc, but there's a tiny progran called "DVD Decrypter" that should do the trick with simple defaults and all sorts of extra choices. Not sure where to find it, or it's current legal status.
for anything other than video: sorry can't help.