I'm also seeing this problem.
I've read all the threads, suggesting it's a network issue; in my case, it's not. I can mount the DNS323 from Windows and Linux boxes on my network, file transfers both directions work fine. I can browse and play media an my PS3 via TVersity from one of my Windows boxes, which is feeding the media from the DNS323.
Firmware 1.05 and 1.06 show identical symptoms.
However, I suspect part (if not most) of the problem is the size of the media library. I recently picked up a second DNS323 as a backup for the first. If I place only a few folders of pictures, MP3s, or movies on the new DNS323, I can browse/play the media on the PS3 without difficulty. When my entire collection is shared on the new DNS323, I get nothing but "A DLNA protocol error (2114) has occurred".
I haven't had enough time to figure out the threshold where the problem started showing up, but I did copy my entire photo collection (about 55,000 images altogether) and that was okay, if rather sluggish during browsing and starting playback. When I add my MP3s (about 80,000 files), nothing but errors.
I suspect the limited amount of memory in the DNS323 is causing the built-in media server to fail with such a large collection of media.
I'm not terribly worried about it, since TVersity is acceptable (barely) for now. However, if a future firmware update makes it possible to browse a large media collection with limited memory in the DNS323, I'll certainly look forward to trying it.