As for DVD vs. MKV, I like both. I can take DVDs with me to friend's and family's houses, or let them borrow them, and share the love. But for my own house, MKVs don't have to be burdened by size limitations which means my HTPC can send better data (higher res, higher bitrates, etc) to my TV and stereo.
I suspect that I'll end up with V3 in both formats, if both formats are created.