I played the m2ts file directly and got pretty much the same results. I need to revise what I said, though. It wasn't so much "choppy" video as it was "not entirely smooth". Since this is only 720p/24, I should be seeing totally smooth playback, just as with the original .mkv file.

Unfortunately, I am unable to test my chapter markers playing the file back this way. I will try one of the other programs to create an iso and do some tests, then I will just try the burn and see how my player handles it.

waspattck said:

You shouldn't need an ISO file to play this is VLC. All I did (after your "step 2") is go to the BDMV/STREAM folder and play the .m2ts file in VLC. Worked like a charm.