I have had trouble getting my PS3 to recognize USB drives. I am thinking it probably will only work with FAT partitions, which would be why your TB drive wouldn't work.

You may not have a Dolby decoder, but I thought they came standard on most new computers. Check the computer settings and see if there is an option in the sound preferences that might help. Download VLC Player and see if the video plays with that.

USB 2 will play most videos with no problem. You may have trouble with the highest of the high definition formats, but I think you will be Ok in most circumstances. That is for external hard drives. USB flash drives have different transfer speeds and the slower ones can be quite slow. __________________________________
CORNBLOSSOM

4. I read a post on here saying not to use portable storage devices for watching movies as USB connection has reduced speed. I noticed no problems so wondering why such a misleading info.

Its not misleading. I demonstrated it in action. The read speed of a USB drive is terrible compared to an internal drive, and that's the good news. The write speed is much worse. That doesn't mean that people have not done it or that it will never work. It depends a lot on your system metrics.

What was intended was to improve the odds of you getting a good render. That means improving your chances through science. That means if you have the choice of putting your source files on a slow drive or a faster drive, I hope you lean towards the faster one. That means if you have the choice between writing to an internal drive or an external one that has an 80% slower write speed you might want to lean towards using the internal drive.

As you are aware, there is a ton of I/O that goes on in producing a video, and hard drives are the slowest component of the whole process. A USB drive can be 5 times slower. So, it just makes sense to go after the weakest link and minimize the chance for I/O bottlenecking if you can.

eSATA is a good alternative to external USB interface. Same idea, but runs at the full speed your internal drives run at. Many newer external drives now have both interfaces onboard.

See for yourself. Download the HD_Speed utility ( http://www.steelbytes.com/?mid=6 ). Then run it to analyze your internal drive speed. Then run it on your USB drive. You'll see a dramatic difference in performance.
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Hi Andy

In relation to your question 1:

1. I tried copying the movies onto a portable 1TB hard-drive. Playstation 3 would not see it somehow when connected. Do you know why?

Your external drive sounds like it is a NTFS format (which is excellent at storing video HD files as there is NO limit on the file size) . However, the downside is the drive in the PS3 MIGHT be a FAT 32 format and if this is the case they have a tendency of not recognising each other.

If you convert the NTFS drive to FAT 32 format the maximum size file you can store is 4GB (almost useless for the HD video files) .

See link below for further info:
http://www.ntfs.com/ntfs_vs_fat.htm

Sorry I can’t help with other questions 2 and 3.

OnTheWeb is correct in relation to read speeds etc.

Good luck
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Without a hack FAT32 drives are also limited to 32GB, so you would have to break that 1TB drive down into smaller partitions. __________________________________
CORNBLOSSOM