There can be some advantages in other formats. If you’re into surround-sound, for instance, a different container may work better. In my experience, DIVX (XVID) avi has worked even on the first WD player whether 5.1 or STEREO, so has .MP4 in STEREO ONLY. The container (.AVI, .MKV, .MP4, etc.) isn’t as important as using a compatible video and audio codec. I’ve experienced an Apple Movie HD Trailer (DIVX .MP4 with AC3 or AAC STEREO audio) with no problems. On the other hand, an HD .MP4 with AAC 6-channel plays with silence. The WD doesn’t support AAC 6-channel audio. Luckily for us, the WD handles many different codecs. The manual lists pages of them. In this case, you can use a utility to convert into another format. For example, you can convert AAC 6-channel audio to Dolby Digital 5.1. There are many good video converters out there. My favorite is RER HD by RER SOFT. It supports basic (1-click) and advanced conversions and works with .MKV containers. There are advantages in other formats such as .MKV if you’d like to listen to surround sound as well as HD video. Also, the best and newest format is the .M2TS with a dolby TRUE HD soundtrack. That’s full blu-ray quality. But you can easily one-click on an .MKV file and experience the same quality. With a .M2TS, you had to help the player find the file by first maneuvering to the directory where the file is stored…usually something like BDMV/STREAM/ . You’ll find that this player accomodates so many container formats and other codecs that you really don’t need to worry about which format MOST of the time… It generally plays them. I recommend you start off with the format you know best. If you like the .MP4 and know how to rip into that format, it’ll work on the Hub as well as the Apple TV. Also, it’s hard to predict the best format for the future. Bluray .M2TS is kind of today’s hotshot, but how about later today? Hope this helps. Happy New Year!