1. Matroska is an open standard
2. Matroska has superior softsub support, while MP4 has just shitty MPEG-4 Timed Text (which sucks balls)
3. Matroska supports more formats natively (in terms of audio, Vorbis and AC3, in terms of subtitle formats, well, everything)
4. Matroska has standardized chapter support that actually works (compared to lolBIFS of MP4)
5. Matroska has also advanced features like ordered chapters, segment linking, editions etc. that MP4 lacks.
6. Matroska has a lot better tools compared to MP4.
7. Everything related to Matroska is well-documented too.>>12384816
Once again, HARDSUBS DEGRADE QUALITY. By burning the subtitles to the video stream, the image becomes a lot more complex, thus requiring a higher bitrate to remain the same quality that it would have without the subs burned in. With hardsubs, you'd either have to choose between worse quality or bigger filesizes, and then there would be the normal problems of hardsubs: can't turn them off, no multiple subtitle tracks etc.>>12384824
In case of shows that air in HD it's simply because the H.264 version is HD while the XviD version is SD.