Okay folks, I am having a set of problems:

A) I've been having problems regarding MKV conversion. I found THORAnime's SWORD AND THE STRANGER 720p on tehparadox and have used many programs (winAVI, All 2 Avi, TSmuxer + IMGburn, OJOsoft Total Conversion) and they ALL have problems with converting MKV to anything else.

I experience either:

(1) audio but no video
(2) subtitles won't transfer over (OJOsoft)
(3) I receive the same error with TSmuxer, yet despite the fact that after I create a Blu-ray file and can click on the STREAM folder and play the m2tc file within, when I put the dvd created with IMGburn into my PS3 I either get nothing at all or just the audio (and that is correctly setting the video to 4.1)

Is there any program out there that will convert a MKV file to something that will play on the PS3... and WORK?

B) even when you create a conversion (ala MKV to AVI file) how can you copy it to a dvd and retain the 720p/1080p settings? Most programs like NERO downconvert to the dvd standard of 480x720 when you copy an AVI file to dvd. I know TSmuxer will create a blu-ray folder set, but if the MKV isn't read properly (by TSmuxer during conversion) your PS3 will not be able to read the dvd created through TSmuxer.