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As with any device that uses WiFi, it is subject to performance degradation the farther you are away from the router. But since the Slingbox is stationary and your Internet speeds are up to the requirements that shouldn't be much of an issue.
Ethernet on the other hand provides constant stability but the downside being the Ethernet cable running through your house. So it really boils down to your personal preference and network speed requirements. Here are the network speed requirements for the Slingbox 500.
The Sling Moderation Team