I think we're all in agreement on 'best' no matter what ;)

Honestly though, the differences between the 2.0 MKV and AVCHD are very, very slight. If Harmy goes with a minimum bitrate that is about twice the AVCHD, and the max is 30Mbps, it's going to be very nice.

At a certain point, I think it's a matter of diminishing returns, especially since it's going to be at 720p. Even the official blu rays are 30Mbps max, and that's at 1080p, so I think we'll be looking at a very, very, very nice encode at what he's thinking (12-30Mbps).

File size difference of the final m2ts would maybe 1GB different, if that, when you're talking about the final encode - it's the 'max' bitrate we're looking at being different, which is not constantly used. If you average the 10Mbps difference across the whole 2hrs., I doubt it's ever peaking to 40Mbps (in 2.0) more often than about 15-20 min. through the whole movie. Even then, the final visual difference will be so minor that I doubt anyone would be able to tell, even on a 100" projector screen ;)

Also, the way this codec works is far more efficient than you might think. Even the "average" being considered is more than twice the average "HD" Netflix stream ;)