Here's my initial review of the April 5 firmware: It's marvelous!
I just converted a bunch of my previously non-playing .mp4 movie rips to MKV with Bunkus' excellent open-source MKVToolNix 3.3.0 utility:http://www.bunkus.org/videotools/mkvtoolnix/index.html
100% of my MKV content plays without pixellation! Picture quality is mostly very good, though I have some late 1940's B&W 480i TV show rips (Daniel Boone 1st Season DVDs) that exhibit bad artifacting during horizontal pans. What I am seeing is not the typical interlace / comb artifacts. The video actually appears to be shredded in places until the pan slows down. It's hard to describe the actual appearance, but imagine how a torn newspaper looks. The same video segments exhibit minimal artifacting when played on our Mac Mini HTPC in VLC, connected to the same 1080p Pioneer Kuro display. Something about the XV-bp1 makes MKV content much more susceptible to deinterlace / upscaling problems than our HTPC. Interlaced MPEG2 content is affected too but it's more subtle than the 480i B&W MKV motion artifacts. Color movie MKV rips don't seem nearly as noticeable. Perhaps the solution is to deinterlace the video in HandBrake, but I get headaches watching more than few minutes of 480p30 playback.
I am delighted to report the new firmware automatically fits-to-screen all my videos -- including MPEG2_ts (ATSC TV), VIDEO_TS (DVD), and MKVs. 16:9 content fills the display, 2.35:1 letterboxes, and 4:3 pillar-boxes exactly as it should. I no longer have to press the zoom button repeatedly when a movie advances to the next VOB. Hurray!
One minor shortcoming of the new firmware seems to be MKV chapters are ignored. I ripped two movies to MKV today using HandBrake with chapter markers enabled. Chapters work fine with these MKV files on my computer. But I haven't found any way to jump to MKV chapter marks on my XV-bp1. Does anybody have success with MKV chapters on their bp1?