To sum up what was in the .net thread before the DNS died:
Matroska or mp4 for the container
h.264 / avc or vp8 for the video
AAC or Vorbis for the audio (or direct stream rips of the ac3/dts if its a dvd/bluray source).
What are you going to be playing these videos back on and what sort of source are you getting them from? Is it just for PC for playback or are you thinking about a media extender / game console / streamer box to play it on the TV?
(19:11) [D3k]Gooberman: pffft, I didnt get owned baal, you just got 60 lucky fusion shots