You can use as you want (personnaly i du AVCHD) and you can use srt too.Am i suppose to use M2ts Ts or AVCHD when i convert an MKV with DTS. Do i select all the files or only the H.264 and DTS (leaving out the srt files)
Do i maybe change something in the General?
How is yojur PS3 configured. Is DTS send in bitstream mode or as PCM converted ?
Is your audio system able to decode the output format ?
Have you try another mkv ?