Upon opening the box, I was surprised at how small the unit was. It is dwarfed by the Vantec HD dock as you can see in my test setup. Out of the box I had some trouble playing one .SRT subtitle file, and the subtitles started at the top of the bottom third of the screen. Also if there were more than one line to the subtitle the lines were spaced very far apart. Very distracting.
Imediately I checked the Western Digital website for a firmware update. Indeed there was. Ver. 1.01.02 dated 12/2/08. After updating the problems I was haver were fixed. The subtitle that wouldn't play worked perfectly. And, the subtitles were at the bottom where they should be and the line spacing was corrected. I also noticed some additions to the setup menu, including subtitle size.
So far all the files I have tested work fine, including the .mkv's which I really wanted this unit for. I am very pleased with the operation and menu system. The only improvement that I can see so far is that they need to give an option to change the subtitle color. The only option right now is white, which can be hard to read on bright scenes. The option of yellow would be very nice. Of course hardsubbed video subtitles look great.
WD also offers GPL code for third party developers, which I find awesome. (Sony please take a hint.)
Amazon has it here: