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Wireless-N can support streaming of 1080p movies...however it needs to be a very strong signal. Take a look at the movies that you are having problems and I would guess that the they are encoded in a very high bitrate. I have installed several of the WD players and used both wired and wireless connections. The wireless installs typically involve numerous placements for the router to get the best signal and still sometimes cannot stream high bitrate 1080p streams.

In most installations, the wireless distance has only been 10-15 feet at only between one floor. You could also see if you can replace and antenna on the router, maybe see if you can load the dd-wrt firmware on it so you can control the output DB of the antenna.
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