I have Nero 10 and also Xilisoft MKV Converter as a registered user. Neither of these pieces of software seem to work properly when converting MKV files. I have tried a multitude of settings and in certain areas of the finished product conversion (AVI or iTouch) there is clumping or pixelization that appears. It looks like large blocks or squares while playing back the file. It doesn't appear in the entire file just random spots. It is not in the original MKV file. I purchased Nero 10 because it was suppose to handle MKV files to DVD conversion. What a joke that turned out to be. The same thing appears to be happening with the Xilisoft converter. Any suggestions of software I can use that wont cause the distortions in a finished AVI or iTouch/iPhone file? A response would be greatly appreciated.