My N8 kenot open any mkv file at all..dunno whether bcos of size bcos all my mkv files >4GB 

they alway convert to mp4 before put into n8

Sometimes I wonder why people watch those big big reso movies on such small small screen. lol

My humble layman explanation since you're comparing this cameraphone wth real digicam:

N8 is the best camera phone currently..well the nxt best probably Samsung pixon 12mp or SE Satio or LG 12mp (Forgotten what model liao)

But comparing wth hi-end digicam such as Canon S90/95, Panasonix Lumix LX3/LX6 & even the hi-end model of Canon IXUS 300HS..It's far from perfection unless Nokia release new Camera firmware!! this is due to the fact N8 having the largest of all cameraphone sensor and this sensor even equivalent to Canon S90 & bigger than my Ixus300HS but due to their pathetic R&D - the cam User interface (UI) & functionalities are not there..  

So if u wanna all-in one gadget - Go for it lah but if really wanna a perfect good camera, go for the real one such as those above 

but n8 can do a lot more.. in terms of convenience i'd say it compares well.