Like the funktionality in the xbmc it would be nice if you can select just an iso or an rar to play a movie, so you have more compact files on your server and not all the seperate vob file with an description thats not telling you any thing
I've been viewing DVD's from ISO's ever since i first installed MP over a year ago, that was one of the main reasons i used it in the first place.
Have a look through general settings, there is an option to automount ISO's using a tool called Daemon Tools.
Regarding Rar files, well i see that causing unnecessary system overhead, couldn't you just unpack the files first? Video data is already heavily compressed, i can't imagine you are saving too much space like that.