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mkv is just the container file. like avi but supports multiple audio channels and higher bitrates. the actual video / audio file can be a variety of codecs
VLC plays pretty much anything and AFAIK comes with all the codecs it needs. If it's crashing then at a guess I'd say either the install is fucked, or perhaps your PC can't handle it? The mkv wrapper (x264) can be quite processor intensive in my experience.