No, it's actually very easy.
It has no real benefits now that you can watch DivX on the PS3.
So, what will be the best way to watch media from my PC on my PS3 then, was thinking of hooking it up in the living room, but first I thought I was gonna use it in my bedroom?
USB Stick/External Hard-Drive
Cool, you have been most helpful. In regards to the External harddrive, would it be a case of plugging it into PC copying said media then plugging it into PS3.
Yep, it's that simple.
I'd say USB Stick is the easiest method though (and cheapest).
I believe so, Im almost positive it has to be in FAT 32 format as well.