The Quest 2 hardware can play 8K / 60fps VR video at stupid high bitrates of like 150 mb/sec and higher that a few sites use without breaking a sweat. That's probably the thing it's best at. And you can definitely see a quality boost between like, 6K and 8K files due to the way VR video is stretched over such a wide FOV.
You can stream the file bit for bit to the Quest 2 over WiFi without dropping any frames or transcoding with Skybox VR and several other apps, provided you have a router with a good quality 5 Ghz Wi-Fi signal. Your WiFi connection speed only needs to be half as fast to make it work if you have a wired connection to your router from your PC. If your Wi-Fi sucks, the only other option is to copy files directly to the Quest 2's storage and play them from there. The write speed of the storage is decent if your cable is fast. But I vastly prefer to stream using Skybox VR, especially having the 128 GB model.
Bonus for me is that with Skybox VR, you don't have to enable file sharing in Windows to make it work. It uses its own protocol that communicates between the Windows app and the app running on the Quest 2.
One important thing is that your files need to be named correctly to play correctly by default in VR video players. For instance, the file should contain 'LR_180' or '180x180' if it's the most common type of VR video, or 'MKX200' or similar strings if it's the increasingly popular 200 degree format. If the filenames don't contain hints to the video format you'll have to set it manually each time you watch an improperly named video file and it's a minor pain in the ass.