Seems like a lot of people have had problems with TVersity and the PS3. I'm running it all flawlessly on the latest TVersity software and PS3 firmware as of July 21st, 2009. I thought I might share what I've got in case others are still having problems. And I'll keep it simple.
Update: After toying with PS3MediaServer, I've concluded that TVersity is still the best streaming solution for the PS3/360, although the other software's not bad. But my results haven't been as good.
NOTE: REMOVE EVERY SINGLE CODEC/CODEC PACK YOU MIGHT HAVE INSTALLED BEFORE PROCEEDING. THERE IS NEVER A NEED FOR A FRESH OS INSTALL. THOSE THAT THINK THEY HAVE TO REINSTALL THEIR OS DON'T KNOW WHAT THEY'RE TALKING ABOUT.
[color=#FF4000]Step 1. Download and install the CCCP (Combined Community Codec Pack): http://cccp-project.net/download.php?type=cccp. During the installation process install everything except for both media players. Just take Media Player Classic (even though which media player you chose, one or both, doesn't affect this at all). This is the best and most comprehensive codec pack available. Use it because I know it works.
Step 2. In the CCCP settings screen that appears after the installation, click Next on the first screen. On the second screen, uncheck everything under 'Haali Media Splitter'. Also make sure nothing under VSFilter is checked. This will prevent Haali Media Splitter from loading, which causes a problem for TVersity to sometimes display the 'Unsupported File Type' error.
Step 3. Navigate to Start > Programs > Combined Community Codec Pack > Filters > VSFilter. On the 'General' tab, under 'Loading', chose 'Do Not Load'. Press OK and close the window. This ensures VSFilter never loads, although if you use the same computer for playback when not on your PS3, you can change this back to 'Load when needed' later.
Step 4. Navigate to Start > Programs > Combined Community Codec Pack > Filters > FFDShow Video Decoder Configuration. Scroll down to 'Subtitles' and check the box beside it. In the window on the right (with 'Subtitles' selected), check 'Accept embedded subtitles', 'Accept SSA, ASS, and ASS2 subtitles (experimental)', and 'Decode closed captions'. Also uncheck 'Letterbox'. Press OK and close the window. This ensures that if you do have a video with subtitles, embedded or not, they will be shown. If the video doesn't have subtitles, you'll see nothing. This also ensures if your video is widescreen, it will fill the screen properly. If it is not, it will appear normally with bars on either side if it's 4:3 aspect ratio.
Step 5. On Vista, disable UAC, restart, install TVersity and re-enable UAC, and restart once more. Or install it whichever way you usually do. This is the way I do it and one that I know works every time with a single problem. DO NOT INSTALL THE TVERSITY CODEC PACK.
Step 6. Open TVersity and make sure the following settings are in effect. Under 'General', actually select 'Sony Playstation 3' (or Xbox 360). Under 'Media Library', for 'Media Library Menus' choose Filesystem (personal preference, optional). Under 'Transcoder Settings', choose 'Only when needed', uncheck 'Decrease the bitrate if it is too high for my network', set maximum video and image resolution to 1280 x 720 (both of them), check "Use DirectShow for Windows Media Encoding, and select 'Windows Media Video 9' from the drop down list, for connection speed select optimize for 'Quality', for connection speed select 'Wireless G (54 Mbps) and connection quality to 'High', select 'Decode the media as fast as possible without taking into account its bitrate'.[/color]
You're DONE! If you did exactly as I said, you should not have any problems. If you do have problems, you probably didn't uninstall everything I told you to at the start, or you followed one of my directions wrong, or you did something slightly differently than me at one point or another (in which case I'm not surprised it doesn't work).
NOTE: If you're like me and use the same computer for sometimes watching anime/other content on that you use for streaming, and want to change your FFDShow settings depending on where you're watching at the time, when you make a change, you MUST run Start > Programs > Combined Community Codec Pack > Settings, then navigate to the second page, check "Re-Register Filters", and click OK. If you don't, unexpected things will happen and you will run into problems, like TVersity not knowing you changes your FFDShow settings.
MY SETUP FOR WHICH THIS HAS ALWAYS WORKED AND CONTINUES TO WORK:
I have a laptop connected wirelessly over a G network to my router, and that router is plugged into the PS3 directly over Ethernet (100 Mbps, not Gigabit). I don't have any problems with playback stuttering, and all of my videos playback with excellent quality on my 37'' Sharp Aquos HDTV. My laptop is a 3-year old Fujitsu Lifebook A6020 (1.6 GHz Core2Duo with 4GB Ram running Windows Vista Home Premium). I usually watch subtitled anime in HD (720p usually, but also 1080p) in MKV with softsubs from most of the popular fansubbing groups. And they all work. I've never come across a single one which didn't for this setup.
If your setup exceeds mine or is the same (roughly), and you have problems, then I cannot help you. I made this guide idiot-proof. Hope it helps someone.
[color=#FF0000]My rig has worked with this configuration since the early days of TVersity, and has not had to change even with the newest updates. So you will not ever have to setup any of the codec-related things ever again in later releases of TVersity. Unless they break the software drastically from what it is now.[/color]