I bought this enclosure as an experiment, to see how convenient copying media to a large-capacity media box like this would be. The previous comment by "Fred" asks why people would consider copying DVDs to a media box? Simple - nowadays, most DVDs are downloaded from the Internet and are usually stored on a hard disk before they're burned to DVD. Rather than going through the process of burning DVDs in order to play them on a TV set, this media box is what most downloaders are looking for - a solution where they can download, play, and then throw away movies without wasting money on blank media.
Few other things I want to mention... First, it is true that you SHOULD format your drive as FAT32. Unfortunately, Windows XP does not allow you to do this within the GUI. You can, however, format a NTFS drive as FAT32 within the command prompt, using the DOS FORMAT command (use FORMAT /? for help.) Once formatted as FAT32, the box will play VIDEO_TS folders just as smooth as a DVD.
One thing I have to complain about the box is that it isn't properly shielded. I sent this media box on top of a Panasonic DVR. With the media box on and the Panny recording, the video on the Panny is heavily distorted. Turning the media box off corrects the video, and turning it back on once again distorts the video. I have to keep the media player a minimum 2 feet away from the Panny. I'm using Monster cables, too, so it isn't the cables that is giving off the interference. If you look at the inside of this box, it is basically all plastic with very little shielding, if any. So before you use this media box near any other video equipment, experiment with the media box turned on.
One other problem regarding subtitles... It seems that only DivX/XviD files are supported. I tried using both SRT and SSA files along with a MPEG-2 file (extension .MPG), and it didn't work. So the only way I can see using subtitles with MPEG-2 video is to actually master a VIDEO_TS build and embed the subs into the project.