Everything pretty much seems to work just as ps3, except, mkv..they do not need to be transcoded while anything avi (Well xvid for sure) DOES...xvid avi's don't even show up in the list I assume because mezzmo passes them without transcode... tryign to play a MKV with transcode for the profile turned on, results in an illegal ts error (Not sure the exact working it had to do with ts though) turning it off the mkv play fine.
MP4 (x264) plays fine transcode on OR off

so I guess we need a new profile that only transcodes xvid/divx to x264 and passes mp4, mkv and mpeg

these are the formats it supports:
File Formats and Codecs
Video
MKV

Visual: H.264/MPEG-4 AVC High Profile Level4.2
Audio: MP3, AAC LC, AC-3(Dolby Digital)

AVI

Visual: MPEG4 ASP, H.264/MPEG-4 AVC High Profile Level4.2
Audio: MP3, AAC LC, AC-3(Dolby Digital)

MP4

Visual: H.264/MPEG-4 AVC High Profile Level4.2
Audio: AAC LC, AC-3(Dolby Digital)

MPEG-2 TS

Visual: H.264/MPEG-4 AVC High Profile Level4.2, MPEG2 Visual
Audio: MP2(MPEG2 Audio Layer 2), AAC LC, AC-3(Dolby Digital)
AVCHD: (.m2ts, .mts)

Photo

JPEG (based on DCF 2.0/Exif 2.21)
BMP
PNG

Music

MP3
AAC (M4A)