... Basically I want to take advantage of the large library of movies I have on my PC. Has anyone run across codec issues or other pitfalls?
I have installed Plex server on a compute with my videos. It's free -- you don't need a Plex Pass -- and has a good interface. It can transcode most sources. Their Website can tell you more. Some users install similar apps.
... Which Roku would you recommend? I know there are several versions and my main need is networking. After that, Netflix obviously and then any other services are sort of secondary perks.
Any will do. Well, most any. I am not a fan of the low-end Roku Express, since it only supports 2.4 GHz band, and some ISPs have recently implemented changes that can cause difficulty with those devices.