To quote: I've hooked up Showtime to the video decoder libraries already present on the PS3. This will accelerate h264 (Up to level 4.2) and MPEG2 video decoding so it can play up to 1080p content.
If you want to make sure that the Cell acceleration is actually used you can press L3 during video playback to see the status window. Make sure that the video codec mentions (Cell) at the end of the row. Just like in this screenshot.
1. Playback of video and audio
3. Unified search
4. View photos and images in slideshow mode
5. Live TV streaming from Tvheadend
6. Spotify integration
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MKV DOES in fact play, the resolution and video quality itself is near perfect, if not perfect. But the rendering speed is quite slow, and the audio goes faster than the video causing it to go out of sync immediately. Also, subtitles are not supported.