External HD question re: DVDs and drive choice

Hi

Will be getting my Apple TV later today, just d/l’ed aTvFlash and it’s ready to go on a usb drive.

I plan on putting all of my DVDs onto an external HD. I’m going to be using a PC to do this. I usually use DVD Shrink to do so. Once I have all of the DVDs onto the HD using my PC, will I be able to simply connect the exernal HD to the Apple TV and have it recognize it and be able to play all of the DVDs? Will the DVDs be labelled? Or just a series of subfolders that are non-descript? I’d like to be able to label each DVD with the name of the movie. How can I do this?

Also, I haven’t bought an external drive yet. I was thinking of the My Book 1 TB by Western Digital, but I’ve read some bad reviews on bestbuy.com. Does anyone know if this is a good drive to use with aTV? If it’s not a reliable drive, what would you recommend?

Thanks in advance!