Mkv, mp4 and avi are all containers. They are like envelopes if you will and inside these envelopes are Video files, sound files, subtitles files... AVIs were all the rage in the past for distributing pirated films, and you still find them in this format on torrent sites, but I've heard they are notoriously bad with multiplesoundtracks, soft subtitles.... Plus a lot of avi's use the xvid codec which is not as efficient as .264 IMO. So now there are really two competing containers: mp4 and mkv. Mp4 is used a lot in apple products - so the picture is usually always .264 with AAC soundtracks. Compatibility with media players is usually high. MKV has become the container of choice for recent torrents just because it's so flexible. You can throw whatever video codec and whatever audio codec and whatever subtitle codec and it'll stick. Of course this creates compatibility headaches for media players, but as long as you're using a .264 codec for the video and something common for the audio like ac-3 or mp3 (godforbid), it'll usually be ok.