'm:video/divx' may be the magic bullet for you but here in the US it seems to be the kiss of death. I tried defaulting video mime-types to mpeg, which resulted in more formats (e.g. wmv) showing up, though playback on these freezes after a few seconds. And transcoding behaves differently with this change, no corrupt/unsupported error but 'cannot communicate with server, please try again later', corresponding to errors like this in debug.log:
[Thread-73] DEBUG 09:23:56.509 mkfifo: cannot create fifo `/tmp/javaps3media/1283174631511ffmpegvideo': File exists
[mkfifo] TRACE 09:23:56.511 Process mkfifo has a return code of 1! Maybe an error occured... check the log file
So the problem here seems to be that streaming never commences at the server side.
Do you have a comprehensive list of valid video mime types to try, or do I just have to troll through the other confs for examples? I know, for instance, that wmv is supported via WMP server [EDIT: maybe not, according to UK specs], but 'm:video/x-ms-wmv' doesn't seem to do the trick on ps3ms.
Btw, flac transcoding works ok for me, both as MP3 and PCM. PCM fails for 24bit audio, though (not that this is any great concern).