mkv is a container, much like AVI, and as such can have a variety of video formats inside it. Most are .h264 coded films, as this is the codec for Hi Def video formats.

mkv hd films will play on VLC no problem, and also Media Player Classic - but be you need a shit hot processor/ram config in your PC to play it back properly, as otherwise you will lose the video to audio lipsync very quickly!