Converting MKV to WMV or DIVX: recommended settings?

I'm using JetAudio to convert some mkv video files so I can watch them
via my media server network and PS3. The results have been quite
degraded. When I select AVI (divx + mp3) with same size and frame
rate as source the resulting AVI file has a choppy frame rate quality.
Trying the same with WMV (and a 512 Kbps video bitrate) resulted in a
substantially smaller file and inferior video quality. Any
suggestions for the best format, framerate and (for WMV) video
bitrate? Thanks