people are still struggling to get VLC/Mplayer and XINE to fully work on the PS3, mainly due to it requiring everything porting over and compiling for the PPC.. some important codecs are still missing.. and there is a distinct lack of decent front end software..
hopefully over the next year or so this may be addressed, I've been wanting to make a linux HTPC for ages, I've got one box I keep upto date with 3 linux distro's and have Mplayer/XINE/VLC, but it doesn't work flawlessy for all media, and development is very slow.. which is why I run XP and Mediaportal as a free media centre style front end.. which allows you to play everything flawlessly.. when the linux catches up, which may take a while, I'll change over to linux, and maybe even run it on a PS3..