Thanks for all the people who have responded to my post.

I can see the problem of running wire through an exterior wall because
I will likely get into insulation material that can complicate the
process. But I determine to give it a try to see if I can run wire
through the insulation material.

I have decided to avoid removing the baseboard heating unit in the
second floor. Instead, I will open the dry wall above the baseboard.
This is not too much a trouble to patch up the dry wall. Besides, the
wall color is white. This should be very easy to match color.

The first floor has wood-looking panel in the wall (instead of wall
paper as mentioned in my original post; I dis-oriented myself and got
confused with the opposite side of the house). I should be able to
remove the panel and put it back afterward. If there is fire-stop
block in the way, I should have no problem drill a hole through it
after I open up the panel.

And I don't have a closet in the area that I want to run wire, and I
don't have a chimney in my house. I would have to run wire through the
wall. This doesn't sound like a big deal now that I know the wall has
wood-looking panel instead of wall paper. If the wall was covered with
wall paper as what I originally thought, I would abandon this project
if I found fire-stop inside the wall because I don't want to deal with
re-doing the wall paper in the room.

I try to avoid using wireless because there is not enough margin of
success if I use wireless to stream video. I am afraid that wireless
will likely not be good enough if I need to stream video to two
locations at the same time (one in the first floor, another one in the
basement). Currently, I will likely only need to stream video to one
location. But I can see the possibility of wanting to stream video to
two locations. I need something that has a bit more headroom for
future expanded need. This is the reason why I don't want to go
wireless.

Moreover, my experience with wireless stuff (a wireless headphone) is
not that great. This discourages me from trying other wireless stuff.

My PC only has a 100MB network card and the media-player that I am
interested to get only supports 100MB connection anyway. After saying
this, I am still planning to put cat-6 cable just in case gigabit
network cards comes down in price. The price difference between cat-5
and cat-6 cables is not that big anyway.

I understand that using wire instead of wireless network can cost more
because the cable itself can cost a lot ($69 for a 50-ft cat-6 cable
as seen in CompUSA, and I need at least two). But cost is a lesser
concern than getting a reliable signal for streaming video.

I can see the benefit of using a mix of wired and wireless
connections. I will go for wired network for now. And I will put in
wireless connection when I find the need to do so.

Thanks for the warning of running exposed Ethernet cable outdoor. I
didn't know that this is bad. But I don't intend to do this anyway.

Again, thanks for all the people who have responded.

Jay Chan