I really think you are making this too complicated and beyond the purpose of this fourm. With that said I give you the following.
There are 4 parts to the "last 100 feet".
Conversion - DVDfab
Storage - Buffalo 1TB NAS
Client - PS3
DVDfab is just 1/4 of the total solution and independent of the other 3.
You already have 3 of the 4 in place, so the question is "What should I use to serve up to the PS3.
My experience is that you do not need alot of horsepower to accomplish this. I am using an IBM T43 laptop for that purpose and it works flawlessly.
The new Media Sharing feature of Windows Media Player 11 lets you enjoy the contents of your Windows Media Player library from anywhere in your home. If you have a home network (wired or wireless), you can use Windows Media Player 11 to stream the contents of your library to networked devices. For example, if you have an Xbox 360 or other digital media receiver (DMR), you can use Windows Media Player to stream music and pictures from your computer to that device. This even works with music that you've downloaded from online music stores and services.
Use the mobile option in DVDfab and choose PS3, this is a profile known to work and as you become more experienced you can create your own profile to suit your individual tastes.
Note - I use an HPmedia Smart connect as my client. wireless G would not work at all but both 100mbs Ethernet an Wireless N stream like a charm.
Conversion - DVDfab generic.avi.xvid.sourceaudio 2 Pass 3000 bitrate+
Storage - 1 - 500GB USB external 1 - 1TB USB external
Server - IBM T43 xpPro 1gbps
Client - HP Media Smart Connect Wireless G
God speed and good luck.