Which Format For Console Media Center?

[l_lNOXl_l]

I just got my new TV for my entertainment system, so I spend a lot more time out in the living room where my Playstation 3 and Xbox 360 are. I finally want to do something about my DVD and BluRay rips though that stream through either the Playstaion or the Xbox via PS3 Media Server. So my question to the community is, what would be the best codec / container to convert my rips to and is there any recommendations on media streaming software?

My ideal media streaming software and codec / container would allow me to use the subtitle features (on / off) and select languages, as I watch a lot of anime, if this feature is possible.

Thank You,
l_lNOXl_l

[goodsharer2012]

As far as i know, the 360 handles avi's with xvid and mp3 audio perfectly. It also does great with subs if they are hardcoded into the avi rather than as a separate file like .sub, .srt, idx, etc. I haven't fully tested everything but i do believe that AC3 audio creates an issue for the 360, possibly showing about 5 seconds of a dvdrip before popping up the "compatibility" warning. But this can also be a "Cinivia" issue instead of an AC3 issue. Also with the 360, i think Media Player (Network Streaming) is the only prog that is compatible. I don't own a PS anymore so i couldn't tell you anything about Sony's streaming.