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You must have a live account and access to the internet. Put the flash drive in the 360, turn it on, go to video library, select the movie you are trying to watch. If it is a supported format is will ask you to download the media optional update (supports most avi, xvid, etc formats).
It will most likely be the hard drive in your PS3 as your games most likely use the hard drive a lot - I would try if you can to take the hard drive out and try and backup the data if you can and then whilst its connected to your desktop run a check disc - you may need to purchase a new hard drive and transfer the data over.
As you can see plenty of guides especially on youtube for replacing the hard drive as for the recovery of the data before you wipe or erase or run a checkdisk on the hard drive you will need a data kit which you can obtain from your computer store or amazon