= video part is not re-encoded/transcodec = no quality loss at allTranscoding/re-encoding
= always you loss some quality, you can't reencode something wihout any modification to the video stream and it meand some loss of details.
If I will be more descriptive: You will loose some quality because AVC --> mpeg2 conversion have to be done. Mpeg-2 as a format have some problems with macroblocks sometimes, 1Mbits AVC original will be always "better" than 50Mbits MPEG-2. "Better" means more details but not that you will spot it
Because that you have "Crazy Bitrate" option in PMS to achieve maximum possible quality(almost lossless).
So If you don't need subtitles and your AVC video stream is compatible with PS3(level 4.1 max) then tsMuxeR is the best(remuxing)
. If you see black picture or need subtitles, you need to reencode(transcode) with MEncoder
which means more CPU power needed for transcoding and also higher bitrate will be generated(due to less efficiency of mpeg-2 format). So it also means that 1080p video playable on WIFI via tsMuxer will not play via MEncoder because bitrate will be up to 10times bigger = 10Mbit/s AVC --> 90Mbit/s MPEG-2 ==> WIFI throughput is about 10-15Mbits max on PS3