PS3 playback of M2TS artifacting but not in Windows playback

I have been re-ripping my DVD collection since my previous storage drive crashed horribly. I am using Windows7 Ultimate in a quad core machine 2.4ghz. Newest CCCP codec pack installed and I have all new versions of DVDFab(to decrypt), Handbrake(to encode), and mkv2vob(to convert from MKV to M2TS).

I am using DVDfab to rip the main movie VOB for processing in Handbrake. I use High profile setting, MKV container and H264 codec @ 60.78% constant quality. Incodes look Amazing. I then am using MKV2VOB with M2TS file type, always transcode DTS, and old file format in settings. It only switches MKV container for M2ts, and transcodes DTS so I get AAC to AC3 conversion.

The issue I am seeing is that I have My nice HDTV hooked up to my CPU as a second screen so I can use MCE, boxee, Hulu, etc. When playing the finished product through my computer Video and audio are perfect playback. But when streaming to my PS3 Hooked up to the same TV I get some video artifacting compared to MCE or Windows media player. I have also played the same video files directly from a usb drive connected to the PS3 and get the same artifacts in playback as I saw streaming with both Media players DLNA streaming and TVersity streaming.

Is this because the PS3 needs a codec update to the newest H264 version via some upcoming firmware update or is there possibly some way to tweak my finished product so that there it is as artifact free on PS3 as it is playing in windows. BTW This makes no diff since it is using shared codecs with the serving CPU but for arguments sake I fired up my Xbox360 as a media center extender and played the same files using that and it played with no artifacts so that takes out using an RGB connection from my TV to CPU as the culprit since my xbox360 is hooked up to ty through HDMI like my PS3 which is the only one getting the video artifacting.

Any light shed on this would be awesome!