Ah, now we're getting somewhere!

Please keep in mind that I'm a novice when it comes to computer-based video. My pc capabilities are limited to hooking up simple usb-driven peripherals, and of course knowing how to hook up audio / video consumer equipment. (Actually I'm probably something of an expert at the latter, but that's beside the point.) So please be patient as I ask you to walk me through some of the less familiar terminology:
For starters, what exactly is a BD-5 or a BD-9? From what you're saying It sounds like a type of rom disc that can be written as either a dvd or a pseudo-blu-ray, no? Are the blanks relatively cheap like dvd-/+ rs or do they run more expensively as do the blank blu-rays (bd-R??). My goal here is the best bang for my buck especially when it comes to purchasing the blanks; I have a LOT of content to back up and store. This bd-5 or bd-9 option
might be the way to go if I can buy them in bulk to save $$.
Along those lines, your second suggestion sounds even more attractive if I understand it correctly. But what, in layman's terms, is a ".mkv" file? It sounds familiar but again I am a novice-to-intermediate level pc user so all the different file types don't really mean much to me. I wouldn't technically know a ".mov" file from a ".rma" file from a ".wmv" file. I only know that each requires different software to be able to run on my desktop pc and notebook, and that my set top media center, network-capable blu ray set top players, and internet/media capable HD plasma tv can recognize and play some or all of these file types depending upon how I set up the hardware interfaces.
Thus, how would I convert my h264 files to .mkv files? What pc program/ application performs this function? Would I be merely
copying the h264's as new mkv.'s or would the process
permanently convert the original files? (My guess is probably the former, but I don't want to assume.) If the former, would I need to have the equivalent empty hard drive space, as with certain ripping programs?
Finally, and most importantly: need the BD drive be actually
BD write-capable or can it merely
read blu rays and be just dvd/cd-write capable? I ask because my Sony VAIO notebook's built in ROM drive reads blu rays but burns most other formats except blu-ray. Perhaps I misunderstood, but that's what I think you suggest in option 1 above. If all I need is a good authoring software and a dvd burner then maybe I don't need a separate bd burner at all? Furthermore, maybe I don't even need the authoring software but just need to know how to do the h264/mkv file conversion & then burn to dvd???
It would be nice NOT to have to purchase another disc drive at this time, 'cause it would save me upwards of $200 bucks! But even if I do still need to purchase a true blu-ray burner, you've convinced me that I probably don't need that overpriced Sony. An Aluratek or Buffalo burner would no doubt suffice, which is at least a $50 savings. That pays for a spool or two of blank dvd +/- DL's! LOL
Whew! Sorry for the barrage of questions. I do greatly appreciate the advice you've given so far, and hopefully you won't mind elaborating further.