I've resolved these problems. This isn't necessarily the best way but as I had no support its the best I can do.
I set Twonky to NSLU to use my dhcp server (the router) to get ip address rather then set it up manually. This allowed the router to give it access to the internet. Even though I had tried with the firewall off the DoS function of the router wouldn't let NSLU access the internet when ip is set manually.
No Media filed:
I created folders in /mnt and /share (I called it folder) I then smbmount //network_share_ip/share/ /mnt/folder -o password=password
smbmount //network_share_ip/share/ /share/folder
This allows the network shared direcory to be selected through the Twonky web interface.
What I still need to do is
load these lines automatically on NSLU start-up
find out how to load in playlists
My experiance so far with media server/ players is that the technology is miles away from being retail ready. It can't be so hard to have a cheap reasonable quality network based set up to stream media content.