Re: MarioKart nkit.iso
Interesting, guess NKit isn't perfected yet. Seems that Paper Mario issue is fixed in the next release whenever that comes.
With some games it actually is necessary to convert it back to .iso
There are known issues with .nkit
It does it with Super Paper Mario, as documented here:
"Freeze When Starting a New Game
Disc images that have been converted to the NKit format will freeze when attempting to start a new game. This is a problem with NKit, not Dolphin. Converting the disc image back to a non-NKit disc image will fix the problem. See issue 11900."
And I even tested it with Namco Museum. It will freeze before you can select a game but is fine if you convert the .nkit to .iso