get a ps3

It is ridiculously easy on a ps3, just through into mkv2vob and it's done in a few minutes. I used a whole system to get it working on a 360 by converting it to mp4 and still had a lot of trouble with audio sync issues (you would see the lips move a good second before hearing the dialogue, very annoying). The process included 4-5 separate programs. Check xbox-scene, someone might have created a batch program to run all those programs sequentially by now (which is essentially what mkv2vob does). Also, do not CONVERT the program, that will take hours or even days, change the "container" which means extracting from mkv and placing in an mp4 container, much much faster. I dropped conversion time from one day down to one hour on my old ass laptop.
once again, xbox-scene forums are your best bet. I haven't had to convert for 360 for almost a year now so my knowledge of current methods is outdated.
The only down side of converting to mp4 (iirc) is that you lose 5.1 audio and can't use subtitles (if thats important to you) to keep 5.1/subs you have to convert to wmv-hd which is much more time intensive. I think you also have to rename the mp4 files to wmv to get it to show up in the 360 dash.
mp4 conversion link