1080p mkv movies on macbook air?

Have you considered that the Air just might be too slow?

How many 1080p mkv files did you try? I have an iMac (see description) with a 8800gs graphics card. And I can't even play saving private ryan smooth on 720p, whereas I can smoothly play all 1080p LOTR movies (mkv), my sister's macbook could also.

Both quicktime and VLC can play it smooth.

But not Saving Private Ryan or Batman. I think it's just that the mkv files aren't always so proper.

I was curious when I read your post, so not having any HD video files, I downloaded 2 HD movie trailors. "Up" in 720P and "The Bourn Ultimatum" in 1080P. Both were in MP4 format, and both played silky smooth with Quicktime (and CPU utilization was 20% or less, to my surprise). I just upgraded to Snow Leopard the other day, so it was all up-to-date software. "Up" was simply stunning, BTW.

I'm on a pretty old machine, Dual 2.5 PowerMac w/ ATI 9600 - depending on the file, most 1080p vids work alright, but stress the card a fair bit. I think the dinky little 1.6 just can't pull off 1080p.
Snow Leopard, or not?

The upgrade to Snow Leopard has allowed my old CD MacBook Pro to play 720p movies using QuickTime X which juddered like mad under QT7. I haven't tried any 1080p recently but I couldn't get VLC or MPlayer to play direct rips from HD DVD without stuttering. I wouldn't expect much better from your 'Air.

1080p movies do play, but only when I run the computer with proper clearance; of course I don't really understand the point of watching 1080p on a 13" display.

What is the cpu usage when playing said file? Is the cpu some how being throttled down? I find that a bit odd as I'm am able to play 1080p mkv files on my Vaio TT(never tried that file on my MBP, not yet at least), and I can play the file with no issue. My Vaio has lower spec ULV intel 1.2ghz(being throttled up to 1.5ghz not sure how), and a intel 4500hd gpu. I know the 9400 is better for games and 3D vs the 4500hd, but not sure about video performance. So, based on that it could be a codec issue, causing the video to stutter and not use the full potential of your rig?