Why transcode just to package media into an mkv container? Mkv is pretty much codec agnostic, you could probably just steam copy. You'll save a lot of time and audio-visual quality by doing so.
I transcode because H.264 saves me a lot of space over MPEG 2. I don't notice the quality loss but I do notice the disk space and faster file transfers.
This is true indeed, mkv is a great container. The reason for my question was that the OP appeared to be transcoding (a codec-level operation) just to switch the container type. When it was mentioned that the transcode was to convert from MPEG-2 to H.264, my question was answered. :)