There is a way that you can jailbreak your system but you have to open it and then downgrade it. The highest firmware that can be jailbroken is 3.55. But check into e3, Infectus, Progsheet are many that you can use. However most of them you have solder. If not there is a mod in the for sale area offering downgrade for a cost. Thanks
DVDs should play fine, but the PS3 is region locked for movies, and it won't convert the frame rate for you for PAL on an NTSC machine. Try Videohelp.com for converter programs - maybe try encoding the movie in a compatible container (MP4) and just watch it that way.