Sony finally gotten smart but did not tell anyone about this,
It's not in the press release that came with firmware 1.90 ... but it's there and working.

this is how you do it :

My first post and it's a good one :

on your pc with all your *.avi movies you start up a media server (i prefer nero-media-home , but the other ones should work also (not tested).
now on your PS3 go to the media server and find the map with the avi-movies , click on the triangle and copy the wanted movie(s).

the movies will now transfer to your PS3-harddisk.
when it finished you can actually turn off the PC ,
and start watching avi's from your PS3.

I turned the pc off to show i'm not streaming the movies from the pc, but play them directly from the PS3-harddisk.

Weird thing is that Sony never told anyone about this new feature , while this feature could definetly boost sales of the PS3 a bit more because the xbox360 can't play them from their harddrives.

I had some disbelieve of other boards but i'd say
go and try for yourselves.

www.qb3.nl

You mean ps3 can play divx avi movies from its hard drive? How can I set up the server connection between my vista pc and ps3? I know 360 can easily detect my pc.

I think you're mistaken. It doesn't play AVI; Nero MediaHome transcodes it to a readable format before/while sending it.

You could use Nero MediaHome like the OP, or you could use a free application like TVersity. Both will appear as a media server in the XMB if you have fw 1.80 or above.