If your media is on USB storage or SMB shares, steps 1-5 should get you going
1. Unplug the ethernet cable from the WAN/INTERNET port on your router (cable from your modem to your router) or disable the WAN interface from your router's configuration menu.
2. Turn on your Boxee...You will be prompted with a screen that says "Boxee can't connect to the internet. You can still use Boxee but some of it's features won't be available."
3. Select OK and continue to the main menu.
4. The bottom of the main menu should say "Boxee is offline... Featured content will return when Boxee can connect to the Internet"
5. At this point if it is just the Boxee servers that are down, reconnect your ethernet cable to the WAN port on your router and see if it will let you play your local media. If it doesn't then continue to step 6
6. If you are using NFS and your Movies file sources are mapped to the devices network name, ex. nfs://MybookLive/nfs:/Movies then you probably won't be able to play any of your media under movies on the Boxee Box (I wasn't able to as it hangs with a spinning circle when I select to play the movie) This could be a router make/model issue and seems to only effect NFS shares for me. The share names seem to change from ex. NAS to NAS.local when you unplug the WAN cable and in return none of my media would play. I also could not browse inside the share by going to Files/Browse/NFS and clicking on the NAS.local share. SMB shares worked fine.
7. Hit your bottom menu button on the Boxee remote and select the gear icon and then select file sources.
8. Select Add sources then select your protocol of choice AFP - NFS or SMB then select to Manually Enter IP / Name
9. From here you want to add the IP address of your network storage, ex. 192.168.1.2 and then enter the username and password of the share if there is one or just click ok if not.
10. You should now be presented with a list of shares on your device, just click the Add Sources button to add them all and Tick VIDEO under media type and NEVER under Type of scanning and click the ADD button.
11. Now hit the bottom menu button on your remote to back all the way out to the main menu.
12. Select FILES then select the source you just added ex. 192.168.1.2
13. You should now see all available shares at that IP and be able to play any movie you like
Ideally you should add your file sources by IP address instead of network device name when creating and importing your media library and you will never run into problems when the boxee servers are down and you pull the ethernet cord from your WAN port on your router to force the boxee into offline mode.
This guide is tried and tested on firmware 220.127.116.1134