There are plenty of discussions about this but in a nutshell DLNA supports almost none of the common encodings you see folk want to use. As to the folders, you can see it is again limited to short names and not as many files in a folder as other (smarter) devices.
Remember this area is well discussed and folk try and try to "find a cure" and come away mad and bruised too many times. You might too.
In short, very few encodings work. And not one person I know has re-encoded their library.
I have set up a DLNA media network using a PC (XP-MCE, sp3) a tv w/ DLNA, a Direct TV receiver with DLNA and an Xbox. All the media is on the computer and that is the DLNA server.
When I try to navigate to the directories where my media files are saved, most of the directories on my computer are not visable from my DLNA boxes (TV, Direct TV,..). What are the folder limitations and restrictions to DLNA - shouldn't I be able to access any folder as long as they are "shared" or will DLNA only look at certain folders? If so which ones? Does it depend on what the Windows Media Center or Windows Media Player libraries are set to? My files are all in directories right on the root drive but I can't see the directories.
Also, I do have a few home movies saved as dvr-ms files using Win Media Center, saved to Shared Documents, Recorded TV (not where the other files are). The Xbox can see and play these but the other DLNA boxes can't play them. What format restrictions are involved with DLNA? Are these dependent on the specific box or are there general format rules? The Xbox can't see the directories/files not in WMC.