Download and install Real Alternative.
Play your RMVB/RM video using your favourite DirectShow player (Windows Media Player, Media Player Classic, etc..). If your DirectShow player is not able to play the video, please google for Real Alternative playback problems before proceeding to the next step.
Download and install Avisynth.
Download and install PS3 Video 9 (uncheck the Avisynth installation as we have installed the program earlier).
Fire up your text editor (NOTEPAD, etc...) and enter the following statements:
DirectShowSource("C:\Movie\test.rmvb", fps=29.97, convertfps=true)
Replace the "C:\Movie\test.rmvb" with your video clip filename and path.
Save this file as "test.avs", you can rename the filename to your desired filename but keep the avs extension. Remember to save this file in the same directory as the RMVB/RM file.
Fire up PS3 Video 9 application and select the convert tab as shown below:
Click the "Convert Video" button, choose the avs file that your have created earlier. Fill in the Title, choose the desired Profile and click "Start" to start your conversion. If you have a dual core cpu, enter "2" in the "Number of Threads" textbox in the Edit Profile Window. This will halve the conversion time :)