If audio is not working, then it is DTS,vorbis etc.
MKV2vob do exactly same things as tsmuxer, mux compatible streams to new container. But mkv2vob do some checkups as a bonus. If it will detect DTS/vorbis and it will convert it to compatible audion format(AC3). If it will detect not compatible compression parameters(level 5.1, reference frame above specification), then it converts video to compatible one(take longer)
Example:
You have 4 MKV videos, one not compatible(video compressed with parameters above l4.1 specs), one compatible but with DTS audio, one fully compatible(audio/video) and other also compatible but also with subtitles.
1. mkv2vob will re-convert video to mpeg2/xvid/x264(video is much bigger or compression takes days when using x264). PMS will do the same but on the fly. Uses MEncoder for that(mpeg2). Benefit for PMS is no manual work in advance(converting to VOB before playing)
2. mk2vob will reconvert DTS to AC3 and mux it with untouched video to VOB container. PMS do the same, video is muxed without any quality loss and audio is re-encoded to AC3 or LPCM(for now recompression still buggy little bit). If you will not reencode audio, you will have no sound because DTS is not supported when not played from medium(bluray,avchd,dvd,cd), can't be streamed. License limitation.
3. mkv2vob will mux all audio and video streams to new container VOB. PMS mux only first audio track+video to m2ts on the fly. No problem to remux all audios, so maybe in new version
4. mkv2vob reencode it to burn subtitles to the stream. Same does also PMS. It is because subtitles can't be stremed in the stream separately.
New version of mkv2vob uses work of deank
http://forum.doom9.org/showthread.php?t=143744 as I can see to create compatible AVCHD structure also when mkv resolution is not avchd compliant(green bars), but it is not about streaming at this point. For burning/USB dongles, video with menu, multiAVCHD is best you can use for now, for streaming without any manual work, PMS is best software around. My opinion.
You can use VOB and convert every video manually to this container or use PMS without this work and only stream it without any work around.
Also I said that m2ts is the best for PS3 because it is bluray/avchd format so if you will have original videos in this format, perhaps 100% will play without any conversion/remuxing done on them.
Then mkv is better for me than vob because no extra work needed before you wanted to watch it. Also DivX v7 supports MKV container so if PS3 wants to be DivX compatible, in future maybe PS3 will support MKV natively...