Playing high quality video on your iPhone/iPad like MKVs in 720p format has never been possible using standard App Store apps. This is because Apple have not allowed App Store apps to access hardware acceleration on their devices unless the video being played is in an MP4 format. This is despite the fact that most MKV files these days simply contain muxed MP4 files. Apps with decent performance like AVPlayer can only produce a slideshow with desynced audio, something I've written about in a previous article.
However, the fact remains that high quality videos are most commonly shared through the internet in the MKV format, especially high definition video. However, a solution has come through Jailbreaking the iPhone/iPad, which allows video playing applications like XBMC to access hardware acceleration. XBMC on the iPhone/iPad plays high bit-rate MKVs in 720p perfectly smoothly. Not only this, but there is an elegant solution to load files onto the iPhone/iPad through iTunes which does NOT require the fiddly operation of OpenSSH.
Video is of an iPad 1 running 720p MKV files on both AVPlayerHD and XBMC.
Jailbreak is required for this hack, here is a a way of searching for the latest guide to Jailbreaking.