As XBMC plays the media folders which are in multi-file (rar) format, the media server will serve these as well, without the need to unrar them.
So, things you need:
1. XBMC with UPnP settings enabled in Network settings OR Windows Media Player with Streaming options enabled running on your PC. (The media folders should be already be added to the library)
2. UPnPlay (http://www.appbrain.com/app/upnplay/cx.hoohol.silanoid ) Install on your android device. Once running, it should find the XBMC/Windows Media Player Servers automatically.




3. Rock Player (http://www.appbrain.com/app/rockplayer-lite/com.redirectin.rockplayer.android.unified.lite) This is your video player. Once you click on a video in UPnPlay, you will have the option of playing the file on your Android device or on a DLNA connected device player. If you select your Android device, you will have the option to select the Video players you have installed on your device. DO NOT use the pre-installed stock players as they will fail. Select this Rock Player and it will work :)