Thanks for the replies. Maybe I should just try an ethernet connection instead and see if that changes things. Don't know how that would fix the 'incompatible file' messages I'm seeing though.

I just read on AVSforums that the PS3 has a depth limit of 7 folders when streaming from DLNA server. That makes sense since I can see loose videos in my 'Movies' folder but not ones that are placed in another folder inside that directory.