guide me about video converting softwares

answer to number 4 first. You cant improve the original source quality. If its DVD quality and you convert it, it will still be DVD quality no matter what you do. If the source quality is poor it will always be poor. It does however work the other way round. If you have a blu ray or 1080p quality film you can reduce the quality.

3, I cant recommend one as I only use Sothink (free) for reducing quality and or converting formats to work on my PS3 and crappy laptop (the laptop wont play HD video)

2, Quote from Videomaker.com "The highest quality video format is going to be the format you captured your video in. While digital files do not degrade in quality during copying, every time they are compressed with a "lossy" compression they lose data, so converting your uncompressed DV formatted files even into a high quality MP4 will result in a loss of quality."

1, MKV is like a container that can have many different file formats inside so the file format is basically the same when you put it in, also it can hold subtitle tracks ect all in 1 file (MKV). Its useful if you want to easily add subtitles or multiple files of different formats so they will all play on 1 player (that supports MKV eg. VLC player)