PS3 and MKV Conversion to Make a Dynamic Media Center
PS3 is not really the ideal media machine to stream files to but if its all you have then you have to deal with its lack of support for a lot of file formats. For more information on how to stream to a PS3 check out my MediaTomb guide.
For some this may be confusing and you still may have difficulty getting transcoding working on the fly. So here are a few resources to get mkv files converted to play on the PS3:
Also, handbrake is a good tool with presets for playback on a PS3 that can work really well and automatically too with the following post:
Bringing it all together with automatic downloading with transmission and using the handbrake post for automatic converting you can have a perfectly automated PS3 that can play every video you have:
Note: If you don't want to play MKVs on PS3 and conversion is too much for you. Or you have a media center or media center extender. You're going to want to pick up the DivX mkv plugin to allow for mkv playback on Media Center machines.
Or PS3 media server might be the way you want to go with a windows machine with automatically set up transcoding.