Those are all just containers. Have a look at the
Comparison Table of Container Formats. For just Standard DVDs of 8 Gigs or so you should be able to pack close to 400 movies on a 3T..that's not too bad money wise compared to what I'm doing with the Blu Rays.
Hell Transformers BD was over 30 Gigs as was Das Boot Directors Cut close to 35GBs!
I just like not having to deal with the Optical disks and it's much nicer just to click a button and you can be anywhere in the movie you want to be.
The only downside of MKV is that it doesn't support menus which are a nice option but I can live without it.
With the ISO when you mount it...it's just going to open up whatever files are already in it be it VOBs or anything else it's holding.
As far as quality goes it depends largely on the transfer. Usual Suspects on BD doesn't look one iota better to me that the DVD version. Reservoir Dogs was also disappointing in BD. Dr.Zhivago on the other hand was friggin' awesome.
There's guys out there who know how to reduce the file size while doing little to harm the video quality using Handbrake or Virtualdub. I've seen a few movies that were just over 1 Gig of very good quality. Not as good as my 20 Gig of the same movie but my 20 Gig wasn't 20x better if you catch my drift.
I haven't messed around with trying to reduce the file size because I don't want to mess with the quality. I'm telling you those HAMR drives are going to hit the market in a few years and god knows what else after that. It's going to get to a point where file size just won't...at least for our current media format. Who knows about the Super Hi Res that's on the horizon.
MVK gets my vote if you can live without the menus.