If your WDTV (Gen1) freezes when you want to play a MKV-movie you can try the following.
- Download and install mkvtoolnix.
- Start MKVmerge GUI
- Load/Add the MKV-file your having problems playing.
- Change the video-stream. Press the video-stream. Go to the ‘Extra options’-tab and change the compression to ‘None’.
- Do the same for the audio-stream.
- Press ‘Start muxing’
Solution found at here.