I used PS3 for almost a year and was still looking for a solution to easily play MKV on PS3, until I found this on avforum:
MKV is famous as an open standard free container format which can hold an unlimited number of video, audio, picture, or subtitle tracks in one file. It is intended to serve as a universal format for storing common multimedia content, like movies or TV shows. Although MKV is one of the most popular formats, it is still impossible to play MKV on PS3.
To successfully play MKV on PS3, a widely used solution without limit is to convert MKV to PS3 compatible formats, no matter you are Windows user or Mac user.
According to avforum, I finally choose Faasoft Video Converter to convert MKV to PS3 for playback.
I have used XenonMKV before to convert MKV to MP4 to play on either XBOX 360 or PS3. Its quicker than a complete re-encode as it just removes it from the MKV container in some way. Takes 5 minutes at most to convert a 3Gb file (in my experience)
More recently I just use Xmedia Recode (free) for all my converting needs. It even has pre-prepared profiles for PlayStation or Xbox compatible files.
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