If you try to play those 1080p, 720p mkv files directly in your Xoom, you'll find it very jerky and seeking/skipping takes forever. That's because Xoom only supports base line profile of H264, in order to play those files smoothly, you need to reencode them.
I dont want to install handbrake so what I use is:
I just got my Motorola Xoom Wifi only a few days ago, one of the reasons that I bought it is because I want to read ebooks (pdf, chm...) on it so I spent a huge amount of time getting Adobe Reader on it. Obviously it's not on the Android market since this is a Honeycomb device, so I tried appbrain, now I can see Adobe Reader but Xoom still refuses to install it. I also tried to install a few free pdf readers but none of them actually shows the pdf nicely. When I almost gave up, I saw that Adobe actully put the Adobe Reader for Android on their FTP server, et voila...
I was back in Vietnam for the last 3 weeks for my Tet holiday. Back there, my house does not have internet connection, luckily I've got a 3G USB device from my friend, which is MF 190(ZTE). This device comes from Vinaphone - one of the Mobile phone service providers in Vietnam. As usual, this device does not come with linux driver, but after fighting with it for more than half a day, I was able to get it to work on my Archlinux x86_64 laptop. The reason why it took so long was that the signal at the place (my friend's cafe) was too low, I did not know that until I brought it outside.
All that is needed for the 3G USB to works under Archlinux is usb_modeswitch (from community repo) and wvdial (from extra repo). After installing them, when you plug it in, you should see a GSM modem in dmesg. The rests are just wvdial configurarion.