I convert to WMV and PSP files. I stream the WMV from computer to Xbox and use my PSP when I travel to Philippines every year.
I mostly just save my movies to hard drive as folders with the vob,bup and ifo files inside until I need to convert. Also a media player can play those files if hooked up to the home network
I not know much about PS3 but if it plays MKV then give that a go to see how you like as MKV is becoming the container of choice for everyone where hard drive space is an issue