Another vote for mkv2vob. Use the x264 codec and make sure u set the file splitting to fat 32.
I don't follow, you don't need MKV2VOB to encode anything, so it doesn't matter what you set the transcoding codec to.
So far, I've downloaded quite a few 720p x264 TV series, the latest being Eureka.
I feed it in, it says "Transcode - NO"
and a minute later, the file is ready for playing on the PS3.
You don't need to split the files if you stream them, assuming you have NTFS drives in your PC?
Because there's no transcoding going on, it makes no difference what the encoder setting is set to. In other words, the quality of the file from MKV2VOB is exactly the same as the original, no decoding/encoding has occured, it's just been remuxed so the PS3 can play it.
If you're using TVersity to stream to the PS3, I assume you have the transcoder disabled? Otherwise you're taking a quality hit there too.
I only mention these, as surely the whole point in using mkv HD files, is to retain as much video quality as possible?
Vin.
EDIT: and I'm not trying to sound all smart arsey about it, although my post my sound like it. I'm just confused, as it's such a simple process, I don't see the need to overcomplicate anything. I download an MKV. I load it into MKV2VOB, out pops an .mp4 file, which I copy to my media player library shared folder on my server. The PS3 plays it. No splitting, no encoding, it's no hassle at all.