I’m going to assume that if you have a file with an mkv extension, you know what for. The container is the Swiss Army Knife of containers, but most of the ones I run across have very high quality video and DTS audio. According to Apple, the new Apple TV will only play 1080p encoded with H.264 High Profile 4.0, but that doesn’t seem to be the case. I was able to easily play a few High Profile 5.1 sample clips without converting them. You do have to change the container from mkv to m4v, but thanks to MKVTools (nagware until you pay $5), it takes about as long as a file copy. The other great thing about MKVTools is that it will convert the 5.1 DTS audio track to AC3 at the same time — required since the ATV doesn’t support DTS.
It really couldn’t be easier. Download MKVTools (I used 2.4.7), open your mkv file, select the streams you want (typically one video and one audio) go to the MP4 tab, choose AC3 and set the device to Apple TV and then hit convert. I’ve only tried samples so far, but they all came out perfect. Drag and drop them to iTunes and then go to Computers on the Apple TV and then to your movies.