No...
The video stream of an MKV does *not* need to be re-encoded... The video stream is *ALREADY* an H.264 compliant video. It just needs to be repackaged into an MP4. The only thing that may(and does) hinder this is the AVC/H264 Level. And this can(and I do) change this to be compatible for Xbox360/PS3/etc.
I don't know why you insist on believing that it needs to be transcoded. Thats simply false.
Converting and MKV to an MP4 should take no more than 10 minutes in my opinion. If you want to go ahead and transcode the video...by all means, go right ahead. But it's foolish and redundant.
As far as keeping the AC3 5.1 audio...I'm looking into it.
The MKV video definitely needs to be converted. The PS3 does not have a codec that supports MKV video unless it's simply a matter of changing the tags. If the video is transcoded, possibly to an AVI, perhaps we could try that. The audio would need to pass through in the transport stream. So the PS3 can't decode H.264 unless it is a 4.1 profile? Well, we could try that. The audio is what I'm really concerned about for my home theater.
The video stream of an MKV does *not* need to be re-encoded... The video stream is *ALREADY* an H.264 compliant video. It just needs to be repackaged into an MP4. The only thing that may(and does) hinder this is the AVC/H264 Level. And this can(and I do) change this to be compatible for Xbox360/PS3/etc.
I don't know why you insist on believing that it needs to be transcoded. Thats simply false.
Converting and MKV to an MP4 should take no more than 10 minutes in my opinion. If you want to go ahead and transcode the video...by all means, go right ahead. But it's foolish and redundant.
As far as keeping the AC3 5.1 audio...I'm looking into it.