batch converting videos to h.264

[avx]

So I've got one of these neat little devices, having hardware accelerated support for the h.264 video codec, but is also pretty slow(/maxed out) with everything else.

Now I'm wondering, what's the easiest way to re-encode these files to h.264, keeping the audiotrack(s) and mux it into .mkv, while staying as close as possible to the quality the files currently have and not growing much in size, if at all?

Input files are mostly, XviD, but some are also DivX and mpeg1/2, everything not mpeg is in .avi containers.
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[Hello71]

Didn't really read OP, but probably best solution would be to use ffmpeg and loop with a simple bash script.