I didn't know that, seems a bit silly having to copy it to the HDD though. I haven't checked the file but in the file name it says divx.
I'll give that a go later though. It's not big deal, I just wanted to check some files on my memory stick before I left for work and the PS3 was the machine I had on at the time.
best bet is to drag your file into gspot and see what codec it was encoded with (filename is largely irrelevant in this case). I am fairly sure xviid does stream (as long as WMP11 Library can see it)
rp2000