My recommendation is download Serviio. It's free and seems to work better than many other alternatives. http://serviio.org/download
-FLAC is NOT supported
-Audio tracks are selectable
-LPCM5.1 is not supported in MKV (may be too high a bitrate for M2TS, needs more testing).
-Subtitles are selectable.
-(M2)TS does not support any compatible format of subtitles.
-SRT embedded subtitles work in MKV.
-SRT external subs work with TS, AVI and MP4 if on the fly re-encoding is selected.
-VOBSUB works embeded in MKV OR authored DVD, but can only be 720p resolution and lower. (Which makes them a poor option for 1080p video.)
-PGS (BD-SUP) doesn't work except as an authored Blu-ray disc.
-XviD is supported in any container.
-DivX works if you change the header to XviD. You can do this with mkvtoolnix or http://www.fourcc.org/changer/
-MPEG2 is supported in .MPG or .(M2)TS, but not MKV.
-H.264/x264/AVC is supported in .MP4, .MKV or .(M2)TS
-High@L4.1 is best (even if it is LOWER patching seems to improve playback)
You can patch other levels to 4.1 with tsMuxerGUI. Results vary.
-For all MKV files add the following command line options: --engage no_cue_duration --engage no_cue_relative_position
If you have subtitles and chapters, the mux needs to be in this order: Video, Audio Tracks, Chapters, Subtitles.
Subtitles before chapters will cause playback problems.
For BD Remuxes-
MKV is best but high bitrates may cause stuttering.
Convert subtitles with BDSup2Sub to VOB/SUB or to .SRT with your favorite OCR software.
...Hope that helps, I've been meaning to collect that coherently for awhile.