Thanks for the quick response. The clincher to make me buy the Ps3 over a conventional Blu-ray player was its media streaming capabilities (should have read up more in advance, but hindsight is a wonderful thing

)
I have o say that PS3 media server rocks, especially as its free - big thumbs up to the programmer
I have considered an xstreamer, but its more wires and to be honest I'm running out of HDMI sockets in the amp (Sky HD, Oppo 980 DVD and PS3, + potentially the revo)
I've tried lots of transcode settings, also using various codecs, as well as the AVI synth transcoder. The only improvement was reducing transcode settings, but stuttering was still present on the 1080 mkvs although not as bad however there was a noticeable reduction in quality (particularly with regard to colour banding and jaggy edges).
Am I correct in thinking that either XBMC and or Win 7 MCE will play these natively so if I was to use the Revo its just an issue of whether the Revo has the power (I'm assured it does) and whether the network has the bandwidth (its gigabit so it should do).
Is mk2vob any better than Popcorns audio converter + TSMuxer as thats what I'm using at the moment that occasionally results in lip sync issues?