As xenon had been giving a long explanation

In short, it's not the container (avi, mkv, rmvb) matter in the video quality, whereas it's codec.

If u want good quality, better get video with AVC/H264 codec. As for the downside of this video codec, user need to have powerful machine to playback this media. Low-end machine might cause lagging or unsync between audio and video, when playback

For normal user, xvid codec is enough in any containers.