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Thanks for all the replies
Regarding hardware, the hardware that I have lying around is a netbook, which I don't think will do a good job of streaming and transcoding(?) 1080p files.
Someone mentioned that costs of PS3 ~= to media player + standalone Blu-ray player.
Pros of the media player would obviously be hassle free with playing movies
Pros of the PS3 would be gaming.
You guys mentioned that I can stream movies on a PS3 directly from a computer. Will a netbook be powerful enough? If a netbook is not powerful enough, my only option is to have both PS3 and the my PC connect to the router through wireless, and I'm not sure if that'll end up with very choppy and laggy video play back
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