Ironically, a post popped up in FCP forum with the same sort of question:
https://forums.creativecow.net/readpost/8/1152317
I’ll post my reply here as well, I think it’s relavent:
I use a legacy version of the WDTV, the one before all of the network connectivity stuff they introduced.
Almost 2 years ago, I wanted to discover the limitation of the box, so I did multiple tests and I was able to run h264 in .mov container at 45Mbps without any issues on playback (from USB drive). I didn’t go any higher…because that is more than enough and reaches the limitation of Blu-ray in terms of bit-rate.
The only tweaky things I did discover was in using my Matrox MAX accellerated compression…if I compressed with the generic mp4 compression setting in Compressor, it worked fine. If I used the Matrox codec to encode to, I had audio cutting out with bit-rates above 3-4Mbps (using AAC audio) other audio codecs worked fine. I tracked this down to the fact that “hinted streaming” needed to be enabled. I think this was only a limitation when using the Matrox hardware to speed up compression from what I remember. The Matrox folks were awesome in helping me track that problem down.
My company uses these for tradeshow video playback…so I have developed a clean workflow for encoding for them.
-Jason