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I used to demux and re-mux MKV with MP4Box so that videos could be played in boxee and Nito. This of course without changing or re-encoding.
Is MP4 less resource intensive than MKV as container or is it worth re-muxing?
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Shouldn't make a difference to XBMC. But you're right, Nito will not play back MKV files worth a darn.
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what i was trying to gauge is:
from a CPU utilisation point of view is it easier to play an MKV or an MP4 with the same encoded content?
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I don't think either container has more or less inherit overhead... but I could be wrong. I've never noticed a difference in performance.
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better to stick with MKV if you have any AC3 or DTS soundtracks. Some players have compatibility issue with MP4's having AC3 or DTS soundtracks. Don't know if XBMC has an issue, but I doubt it.