Hi guys. I think sony probably uses dedicated hardware encoders to create their files. Some players will start to get jerky if the framerate or bitrate is set to more than it can handle. Test this by doing some short 1 chapter rips of an action movie like Casino Royale. One of the early chapters in that movie has a chase scene that I used for testing. Leave the framerate at the default for now and try reducing the video bitrate in 10% steps. If you get to the point where the picture starts looking grainy, reduce the framerate and start over again. I think that screen size is larger than the PS3 native and probably does not gain you anything (and may be part of the jerky problem). Some players have a fairly narrow sweet spot of framerate/bitrate/screen size where things really look good, just takes some experimenting to find it for optimum results. You can also test for bit starvation in the player by trying a short rip using the “Fixed File Size” option, which I think yields a variable bitrate encode.
Get VLC Media Player (free) and try the files in that to see if they are jerky. It will also report on dropped frames, framerate, input read rate, stream bitrate etc. in real time under View–>Stream and Media Info–>on the “Advanced” and “Statistics” tabs. I would be very interested to hear your results on some of this.