GearXS has the Western Digital WDAVN00BN WD TV HD Media Player for USB Storage Devices (new OEM in white box) for $50 with free shipping.
Full HD 1080p video playback and navigation from USB storage devices
HDMI and composite video interfaces for easy connection to a TV
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does this play MKV files?
#1 Why not click on the link and read.
http://lmgtfy.com/?q=does+the+wd+media+player+play+mkv
Here you go #1
I think the only thing to consider is that this player doesn't do DTS audio without a DTS reciever (just pass through). The Live player does DTS decoding. An issue if you have DTS audio in MKV files connected directly to TV.
what modern receiver can't do DTS?