I was using mkv2vob, but was keeping copies of the mkv's as well. That meant in actuality I was storing the same stuff three times (2 copies of the mkv, one for backup, and the version to play on the PS3). With the latest release of mkv2vob that can automatically select between mencoder and tsmuxer, I decided to use PMS exclusively, and ditch my special PS3 versions. This saved me 200gb of disk space!!!!! Also, with mkv2vob you could only keep one audio track, whereas the mkv's can store multiple audio tracks.
However, there are some minor issues. FF and REW don't seem to work at all for me, but using the "Go To" works. Also, it takes a few seconds longer to start playback. I also found that I used to get lip sync issues sometimes with mkv2vob output when I created the mkv's myself using Handbrake, but I don't seem to have that issue with PMS.