I am not rude but if seemed to be, sorry
With Vocabulary I mean finding meaning for TRANSCODing word.
I think that I answered your question but maybe you don't understand..I will try it in other words.
PMS is software which can stream files to PS3 as is(in case PS3 supports this kind of files) or will transcode/re-encode/recode them to something what PS3 supports, like MPEG2.
PS3 don't support e.g. MKV container, some MPEG4/AVC compression settings breaking level 4.1(bluray standard), weired AVI(DivX/XviD) compression etc.
In case your file can't be played, you can use ###TRANSCODE### folder which contains same files but always re-encoded to MPEG2 for better PS3 support.
It mean if you have some XviD files, when PMS stream them as is, you can see them as DivX, but in TRANSCODE folder MPEG2 will be shown.
PMS supports 3 ways how to send data to PS3
- sending file without any change(direct streaming)
- converting files to MPEG2 on the fly(trancoding when PS3 can't play it natively)
- re-muxing file(in case codec is supported but not container=MKV file etc.)
When MPS will send data as is(.TS,.M2TS,.MPEG etc...) you will see correct info about your file on PMS but for other ones you will see MPEG2.
Hope it is more understandable now...
Also it could be good to read also some other posts in this forum which will be usefull for you to understand what PMS does and how so lot of your questions will be answered