Instructions
Using PS3 Media Server
Enable media server support for the PS3 under the "Settings" menu. Go to "Network Settings," select "Media Server Connection" and choose "Enable."
Download and install the PS3 Media Server for your operating system; versions are available for Windows, OS X and Linux machines (see Resources). Make sure to read the installation instructions carefully to make sure your system meets the minimum requirements and has all the necessary software.
Turn on your PS3 and log in to your user account before starting the PS3 Media Server. Run the server on the same computer as your MKV files. Once the media server detects your console, select it from the "Videos" menu.
Select your MKV file from the "File" menu. Your TV screen will be black for a moment while the file loads; be patient and avoid hitting unnecessary buttons.
Converting to MP4
Choose a media converter for your files. MediaCoder's iPod Edition is a simple interface and supports the MP4 format, making conversions quick and easy. MP4 is especially useful, as it's widely supported on most handheld devices. If you're not in a hurry, use VLC's record feature to create a copy for your video, though it records as you play your video (see Resources).
Click the "Add" button in MediaCoder and select the MKV files you want to convert. If you're using VLC, open the video as your normally would, then pause it, go to "View" and select "Advanced Controls."
Select your desired output from "Format" drop-down menu in MediaCoder. The "Fast MKV to MP4" option is the quickest, but requires that the MKV file already use the right codecs -- if it doesn't, your video will not convert correctly. MediaCoder's iPod Edition offers several options for full screen, and supports video up to 720p. If you're using VLC, click the red "Record" button on the "Advanced Controls" menu directly above the playback bar.
Click "Start" in MediaCoder to begin the conversion. A window that displays the status of the conversion, the time elapsed and how much time remains. Start playing the video in VLC; when the video finishes, press the "Record" button again. The recorded video saves to your default "Videos" folder.