Personally, I don't know what can and cannot be done with your streamer. If it is similar to a Popcorn Hour for example, then yes, you can have it show movies with or without a pc running. If it has either internal or external storage, that is.
As for your NAS question, NAS stands for Network Attached Storage, which means that it has a network interface. A regular external drive obviously doesn't. You could however attach a regular USB drive to your WL500g and make the connection from there. It depends on what your Linksys supports as to remote connections ([Samba] file share, NFS, ftp, ...).