mkv (Matroska) is a container format, not a codec , just like avi it can contain any codec

its features are :
* Fast seeking in the file
* Chapter entries
* Full metadata (tags) support
* Selectable subtitle/audio/video streams
* Modularly Expendable
* Error resilience (can recover playback even when the stream is damaged)
* Streamable over the internet and local networks (HTTP, CIFS, FTP, etc)
* Menus (like DVDs have)