Thanks for the info and presets, 4wd.
So I found out that I made a mistake. Apparently for the PS3 to recognize video files on an external USB drive, it has to be in a specific folder. So I spent all those hours converting a video using XviD4PSP and then deleted the file when I couldn't get it to work. And it probably would have if I had just put it in the right directory on the USB drive.
Also, I recently used DVD Ripper Platinum to rip a DVD to the PS3 using a preset. It worked on that over the course of 3 days (but probably took less than 48 hours, if that makes sense) and split the movie into 3 different files (maxing out at 4GB due to PS3's fat32 limitation). Turns out it thought it was a good idea to change the resolution to 1080p when ripping from a DVD (which is 480p IIRC).
I'm just having all sorts of bad luck with this stuff.
Too bad it seems to be a result of user error.