What I would suggest is this:
Download a free/lite video application which supports streaming/downloading videos from a network drive. I think OPlayerHD Lite is an example.
Browse to the IP address of your WiDrive using either FTP or SAMBA, whichever it supports.
Try streaming a video, try downloading a video.
If those work, then you know that the setup is working fine, and it is likely that the limitation is in either the video players you have installed, or in the WiDrive application. If downloading works but streaming doesn't, or performance is poor, it suggests that the WiDrive can't provide a fast enough rate for useable streaming.
Edit: In order to Open In... an application, the file would have to be fully downloaded to the iPad and transferred to the working space of that application. You cannot Open In... a streaming location of a file. Perhaps that is why the WiDrive application only offers that option for small files. (If that is the case.)