Even if you have a set top box that plays .mkv you have to make some decisions about storage. If a stack of Sata drives in a cabinet is an option that's cool. My budget can't handle that. If you have a nice looking .mkv it will often convert to DVD9 which, played on an upconverting DVD player, can look very nearly like the source in quality. The other option, to shrink the .mkv, requires 4 or 5 or 6 hour sessions with Handbrake. If you have a super PC though, that may be a viable option. I'm not sure how well Handbrake handles multi-core. I've only actually done a few runs with it. I got good results on one run that took about 4 hours. When it starts telling me the job is going to take 7 or 8 or 9 hours, I abort. I don't have the patience for it.
Once you start watching a TV with 16x9 mode you probably will want to get everything 16x9 anamorphic. 4x3 letterboxed doesn't seem so bad played on a conventional TV, until you start watching a 16x9 TV, then go back and look at some of the old DVDs you bought. One drawback to doing HD => DVD is resizing down is slow. What you end up doing is usually shaped by what equipment you have to watch the stuff on. On some boards if I mention I don't mind burning subtitles into the video, it's like I spoke out against democracy or something!! Oh no!! You're ruining the video quality!!! Like I have a 5 foot wide TV to watch it on like that guy!!