What Daiz said.
In fact, that's how I was able to watch Seirei no Moribito through my PS3. If the encoding profile is too high (i.e., 5.1), you have to change it to 4.1 by using a program called H264info. The PS3 can read .mp4 videos with a profile of up to 4.1.
The process is quite long, but I found an easier way to convert .mkv videos. Just google a converting program called "GOTSent" and give it a try. It has only failed me once, and when that happened, I had to do it the hard way. There's already a how-to thread for that somewhere here.
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