Yes... Telekinesis works very well for accessing your files.
Streaming on the other hand is a little more complicated. Although the iPhone supports streaming of mpeg4, it either needs to be an mpeg4 file that is equal or less than 10MB or it needs to be in m4v format (another type of mpeg4). For example you can use Handbrake rip a movie from DVD to mpeg4 format, but you will not get a very good quality movie or TV show for that matter for under 10MB. They usually run about 500+MB for a movie, which is not downloadable in iPhone's Safari. If you convert it to m4v, it can be streamed over wifi, and if you have patience it can even be streamed over the EDGE network.
Movies your buy from iTunes are by nature streamable to the iPhone (with chapter markers, etc.) because they are true m4v files.
So, as I said above, in order to make your mpeg4 movies streamable you need to convert them into m4v. I have been using quicktime pro to convert it. They actually have an iPhone setting. Works like a charm (I am actually looking for a quicker solution though if anybody knows one).
Once telekinesis is up and running, you open up your iTunes Library, Open the Movies Folder, click on your movie in M4V format, and you will be streaming.
Music files open without a problem, but there is nothing currently available to make a "playlist" or multiple songs play back to back. You have to go into the folder and click them individually. I suppose if you really wanted to hear a song that you didn't have on your iPhone, it would be worth doing.