Adding a heat sink fixed my stuttering/freezing issues

[#1]

Ever since I got my WDTVLS, I have had issues with it playing video wirelessly from a Windows 7 share.  I had assumed my old wireless access point just wasn't up to the task any  more, so I replaced it and saw no change. I opened the device (voiding my warranty), and discovered that the main integrated circuit (a.k.a. "chip") was scalding hot when playing even low-bitrate video.

Running the device with the top off didn't help, so it isn't an airflow issue.  I added a couple of stick-on heatsinks to the IC, and since then I have had zero issues with video freezing and other playback problems.  Since this simple fix seems successful, I will eventually use thermal epoxy to attach a larger heatsink, and probably drill some ventilation holes in the case for airflow.

The heatsinks are small (about 1cm square) and were intended to stick on ICs on desktop computer RAM modules.  I got them from Micro Center. 

[#2]

I spoke too soon.  Certain 1080p videos still cause issues.

I have now used thermal epoxy to attach a MUCH larger heatsink to the IC.  The cover is still off.  Even with this, the heatsink is often too hot to touch.  Next step will be to add a small fan.

[#3]

I certainly agree on the issue. I have the WDTV Live Streaming Player since a couple of months (3rd wdtv I bought) and was going OK until yesterday. All of a sudden it didn't connect to the network and WIFI dissapeared from my networking options. Using a cable was fine, even attaching a TPLink wifi dongle seemed to work, but the internal wifi did not show up. Solution (so far) was to disconnect the power cable and let it cool down for some minutes; wifi is back. So, I guess I'll have to turn it off more often (wish at least it had a power button) or find a good way to cool it as you did. By the way, pictures on your solution will be appreciated. Thanks.