Well, you will always have quality loss, unless you want to make a looseless format, thats about 20-30 GB or bigger.
But if you convert it to about same or bigger size you wont notish it so much, if you have a good program.
I use Any Video Coverter 5 Free http://www.any-video-converter.com/prod ... ideo_free/
It got profile for PS3, so its pretty easy to use, change the bitrate option if you want, since standard is 2000 kb/s about 1400 MB for 1:30 hour movie. But play around with it, it does a decent job, and fast if you got a nvidia card with CUDA. Also select 2 pass encoding for better quality.