Either or. It really doesn't matter. However, you might want to edit the cinfiguration (config.xml) before you burn.
<videos>
<share>
<name>Network (XBMSP)</name>
<url>xbmsp://192.168.0.1/videos</url>
<cachesize>256</cachesize>
</share>
<share>
<name>Network (XNS)</name>
<url>c:\shared\
[email protected]</url>
<cachesize>256</cachesize>
</share>
<share>
<name>Network (SMB)</name>
<.url>smb://username:password@workgroup/computer/share</url>
<cachesize>256</cachesize>
</share>
<share>
<name>HDD</name>
<url>e:\videos</url> <--The HDD Video link
</share>
<share>
<name>DVDROM (UDF)</name>
<url>d:</url>
</share>
<share>
<name>DVDROM (ISO9660)</name>
<url>iso9660:</url>
</share>
</videos>
This is the video link part of the file.