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Will Windows7 Media Center now let you play .mkv videos on the 360 as extender?

Now that DVBLink is out (I see a free trial is available) for my HD-PVRs, I'm tempted to give Media Center a whirl again (currently using SageTV). However, even if TV works ok, I need to be able to access a wide-variety of videos on my home server, from .mts to .mkv. Will these play now on the extender (or projected to play on the final Windows 7 release if not the public RC) ? If not natively, are there good on-the-fly transcoding options available?

Any thoughts appreciated! Thanks,

-Chris C.
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