yep... MKV's definitely play through the normal video player on the 360.
windows home server stored mkv's (smb shares) > in windows 7 media player library > 360 video player connected to windows 7 machine.
you need to enable streaming on WMP (in video library there is a stream button, click it and select "automatically allow devices to play my media", then click more streaming options, next screen is self explanatory)
you need shark codecs, and you have to configure as admin for windows file associations (before installing shark, make sure you remove all codecs from your system, you dont need them)
also need the optional media update on xbox (i already had it, but reinstalled it).
after you set it all up, reboot both your computer where WMP is, and your xbox and boom, MKV on 360. no tversity, no transcoding, no ps3media server or plex.
of course you could hop on craigslist and buy a used apple tv 2 for $50, spend 10 minutes to jailbreak it, and have mkv support in xbmc without the need for a computer or windows media player (just need smb shares).. aTV2 is much smaller, and 100% silent, also draws much less power.
No trees were harmed forming this post, though many electrons were inconvenienced.
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