I am also owning a Sony Bravia KDL-46W5710E (same as KDL-xxW5500 with one minor make-up change) and PS3 MS is working well.
Your PS3 Media Server will recognize directly your Bravia W5500 series if you install on your PC (in my case Windows XP SP3 & Vista SP2 and Linux Ubuntu 9.04) at least the version 1.11.350 (1st implementation of Bravia) or above.
I have PS3MS v.1.11.356 installed and I can play Music, Photo and Video on my TV (PS3 MS DLNA => Bravia DLNA Client).
By default, you have access to all your PC's HDDs, so for faster access to your media files you have to enable in the "Navigation/Partage de dossiers" folder by clicking the check on the left of the "Activer la mediatheque". Then add the folders you want to access from your Bravia TV to "Dossiers partages" by clicking the big Green + (plus) button and select the desired folders.
Now, regarding the poor quality of image... I have made tests on the weakest PC I have: CPU Pentium M (1 core ) @ 1.5 GHz, RAM 2 GB which is 5 years old! Even from this one, I have a very nice playing (image + sound) of AVC Full HD (M2TS @ 1920x1080) videos on my TV with PC CPU usage always below 40%! Using a Wired 100 Mbps LAN. With a 85 Mbps Homeplug it is just a nightmare, so I thought was my poor PC not enough powerfull, but in fact was not...
The issue could be the NETWORK: WiFi g @ 54 Mbps and HomePlug @ 85 Mbps (CPL in French) are not working properly for HD video due to their limited REAL bandwidth.
So, you need to set up from best (++++) to good (+) the following type of network: Wired Giga Ethernet @ 1 Gbps LAN - Wired Fast Ethernet @ 100 Mbps - A/V HomePlug (CPL) @ 200 Mbps - WiFi n @ 108 Mbps. Don't forget if you have a bottle neck on your LAN, your real LAN speed will be limited to what this bottle neck can achieve.