I use a program called "PS3 Media Server" and it works great. You can get it here:
http://ps3mediaserver.blogspot.com/
Once you install it on your PC, you need to keep it running. It doesn't use a lot of resources and there is an option to have it start at startup.
You can then choose which folders to share. Don't worry too much about the encoding settings and all of the fancy stuff - run it, pick some shared folders, and you're probably good to go.
Make sure that Windows allows it through the firewall (I can't remember if I was prompted to make an exception, or if it required one at all). Then, on your PS3, go to video and select "search for media servers". It should show up from now on whenever it is running on your PC.
It can handle so many formats - even full DVD images if you have ripped a DVD but haven't re-encoded it into a standard format. It also does music and photos too.
I download a bunch of video podcasts through iTunes and I have those folders shared to my PS3. That lets me watch some content on the PS3 instead of sitting on the PC.