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please, stop confusing mkv with a video codec.
mkv might be supported at one day, but sms won't handle 99% of the files. they usually contain h264 + aac audio, neither of which is supported and neither of which is likely to be handled by ps2 with decent performance.
i would assume that SMS does pull all available performance tricks already when it comes to video decoding (i wonder if the VU's make a difference here), and we won't be able to squeeze any more video playback performance out of ps2.
I think the proper way to support other codecs is via realtime transcoding, done on a networked PC with much higher horsepower (as is done currently with some programs on iOS to stream AVI/MKV/MP4 files over 3g/wifi even if they don't natively play on the device). Anyone tried out decoding any higher-res XviD videos in SMS with the vmode set to 720p or 1080i? I may do some testing soon to see just which resolutions are playable with SMS as it stands now.