That has to be a load of garbage. Ripping to MKV is just dumping the whole video stream from the disc to the drive. It'd be faster, as it's only copying the files necessary for the main content - not the extras.
If it's juddery on XBMC, you'll need to look at the specs of the PC and what hardware acceleration you have enabled.
No it is not.
MKV is the container for the video, you then have the various codecs which store the video information such as x264 and h264 (these are the most common for MKV files). Data stored on DVD's (I have no idea about BD discs... yet) is not stored in this format (MPEG2 I believe) so it has to be encoded first to MKV. In the past I have had all sorts of sync issues during conversion due to ripping straight from the disc so it is from experience from which I speak and I no longer do it, I now dump the whole disc to my HDD and then do the conversion to MKV or whatever.
Stoner81.