I don't have the WD, but it sounds like a sensible idea, depending on its price in Australia. I note that when it was introduced late last year, the asking prices in the US was US$130. So if it is around the A$200 mark, that would probably be a good price.
I use my PS3 for high def video streaming (networked to my computer and connected via HDMI to my HDTV). But the PS3 also has a function like the WD i.e. the ability to store your HD video on a USB drive or external hard drive and simply plug that into the PS3 which detects the media and plays it back beautifully.
The major limitation from my own point of view is that the PS3 can only 'see' drives which are formatted with the older FAT32 system, and not NTFS. And this in turn means the files which the PS3 can play this way must be under 4 GB. I would try, if you can, to make sure the WD does not have a similar limitation -- though I would note that most (all?) USB drives come formatted with FAT32 anyway. (The PS3 will also only play video if it is in a folder on the drive labelled, in upper case, 'VIDEO'. But that is easy enough...)
The main thing that the WD can't do is, of course, to play discs of any kind, whether they are standard def DVDs, Blu-Ray, or AVCHD hybrid discs, which the PS3 can of course do, and do so beautifully. But of course the PS3 is pretty expensive here in Australia (over $600...) So if the WD is roughly a third this price, it would seem an effective alternative...
Oh, and just to tie all this back to this Forum,

all my home made high def video is edited and authored using, earlier VS 11.5+, and now X2. I tend to restrict myself to HDV format, though occasionally branch out into AVCHD and make excellent AVCHD hybrid discs with it -- all of which, as I say, plays back beautifully, regardless of the medium I use, over the PS3. I imagine that would remain true for the WD.
