Hello Guys, well....
I tried what you described and it worked. I unticked the ''transcode DTS'' and allowed MKV2VOB to patch the DTS soundtrack.
Is it true that this patch/tricking method came with a recent update of MKV2VOB as in the past I would only ever get static noise and on a few occasions after trying many other ways would only ever get ambient sounds like music and sound effects as if I was only perhaps getting the rear surround channels.
Also I remember months before I ever made sure I had DTS transcoding ticked - audio worked but sometimes when checking was only ever 2 channel PCM, all the other times it was dolby digital where DTS was obviously not present in the source MKV after conversion to VOB. When on the occasion after MKV to VOB conversion, when checking the PS3 it displayed 2 channel PCM and not Doldby Digital. What I did not actually check was if the sound was coming out of all of my speakers as at the time I assumed it was not as 2 channel PCM was displayed. Anyway as the PS3 did not display DTS as being the audio source and instead said PCM 2 channel made me also think DTS was not present and did not realise it was DTS but another name in-order to trick the PS3 .
After seeing the same thing today I set my amp to direct and not not use the amps DSP and yes sound was correctly coming out of all speakers despite the PS3 showing 2 channel PCM

At the moment I have all of my 5 speakers at the front, as I am still yet to buy long enough cable to place them at the rear. (Thanks RS !!!) Should I of had my rear surround speakers behind me from the start I would have realised sooner that although the PS3 said PCM 2 channel I was infact getting sound to all speakers without processing with the amps DSP's.
One thing which has confused me, the little DTS light on my amp now lights up? How come this happens is the PS3 Phat can not Bitstream?
As for the OP, I guess I incorrectly assumed that anyone with Winsows 7 would mostly have a good spec PC. At home we have 4 computers, all running on my network, one is a Sempron processor, and yes it will struggle if transocding MKV in realtime via PS3 media Server but if you pause the movie at start, go make a cup of tea and have a smoke it seems to do the trick. My own PC has a core 2 duo E6300 @ 1.86mhz which is my main media PC and does not seem to have troubles. it is 3 or so years old now so certainly not high end by todays standards.
Thanks guys and sorry for being