No mkv i'm afraid, however you can use a handy tool called mkv2vob (free software) which converts mkv files into a format compatible with the PS3 and nearly always leaves the sound quality and video completely untouched. Most mkv files will convert in less than 5 mins, unfortunately some use less common video/audio codecs and can take up to an hour (these are rare these days as most people now rip mkvs using codecs the PS3 supports) it's these problem files that will experience a small hit in audio/video quality, but still nothing to cry over. When it comes to non-HD filetypes the PS3 supports most things, i haven't seen a avi file that it can't play in ages.
No codecs need installing, it's all integrated into the OS