Firmware 2.20 was released last week, and it seems that Sony has tweaked some code that is causing problems with streaming MPEG-4 videos. Usually, Firmware updates are released to fix bugs and errors with the software, but it seems Sony has managed to do a u-turn in this particular case. According to several posts on the Official PlayStation forums, MPEG-4 videos stutter to a point that the video is completely unplayable.
Aside from this, some even posted additional problems that they were experiencing. Streaming mpeg-2 files at 10x, 30x, and 120x speeds run only at a tenth of the designated speeds. Also, users have found out that skipping over unwanted content has become something that was very difficult to do. The issue is noting to do with the Media Server connection or the software itself. Media Server software such as TVersity and Nero Media Home have all tested fine with other content including DivX/XviD files.
Hopefully Sony are on the case and are preparing a fix for this issue. Look our for more details on this story over the coming weeks. We may just get a minor firmware update to fix this issue.