Hi all,
I been wondering for ages how to play MKV on a PS3 without actually doing transcoding for each file manually... Well, somebody actually came up with a crash 'n' burn solution: make software which transcodes files for you in real-time!
http://ps3mediaserver.blogspot.com/First of all, it actually works. It can even transcode video/audio tracks separately depending on which one isn't supported by PS3. Most importantly, it works out of the box and no real setup is necessary. Several things I found quite important to do: in transcoder settings (MEncoder) enable subtitle styles and disable "A/V sync alterntive method" this was causing audio sync problems for me. Some things need to be tweaked but it isn't bad at all. For example, UNIX has software called MediaTomb which is also very good but requires much more fiddling and setup.
What are the downsides?
a) You need a good PC, preferably with a multi-core CPU. Real-time transcoding is very CPU intensive.
b) You need good bandwidth. Streaming HD movies over wireless is pretty much impossible. So either temporarily run a cable through your house or if you got spare cash buy some
powerline communication adapters! These things are amazing, they allow you to run a network through electricity lines. They also work out of the box and seem to do the trick just fine.
c) Regarding software, seeking transcoded material is pretty much impossible. It isn't a huge downside but can prove rather annoying.