Setting Macbook Pro to never sleep

I just got the Apple TV 2, and as you all know, iTunes has to be open and running on the machine with which Home Sharing is set to on, in order to stream that content. Ok, no problems there. But curious question. My 2007 Macbook Pro is my main machine so it has the library I am sharing. It is currently set to sleep after about 2 hours of no activity, the screen sleeps after 15 minutes. So if I am watching a movie that goes longer than 2 hours it will drop the connection? If I set it to never sleep is that a bad thing? Am I going to shorten the life span of this thing? I've checked to put the hard drive to sleep when possible. Also, and this may come across like a total doof of a question, but the machine will sleep no matter what when i close it right?

Thanks for baring with me folks, and for the help.
Scott