The official video file specs are as follows:

• Memory Stick Video Format
• MPEG-4 SP (AAC LC)
• H.264/MPEG-4 AVC Main Profile (AAC LC)
• MP4 file format
• H.264/MPEG-4 AVC High Profile (AAC LC)
• MPEG-1 (MPEG Audio Layer 2)
• MPEG-2 PS (MPEG2 Audio Layer 2, AAC LC, AC3(Dolby Digital), LPCM)
• MPEG-2 TS (MPEG2 Audio Layer 2)
• AVI
• Motion JPEG (Linear PCM)
• Motion JPEG (?-Law)
• AVCHD ?.m2ts / .mts?
• DivX
• WMV
• VC-1?WMA Standard V2?

Don’t worry, even though MKV is not listed above, an MKV file can be re-muxed into a VOB file which is natively playable on a PS3. The easiest way to accomplish this in Windows XP or Vista is by using a program named MKV2VOB.

In case you are worried, this process will not re-encode your files. So you won’t lose quality and it won’t take a long time. Most of my High Definition MKV files can be re-muxed into a VOB file in less than 30 minutes.

Have fun and enjoy playing your MKV movies on your PS3.