I seemed to have solved my Lucid Virtu problem.
Since C4D runs OK on my HD 5770 card, but Black Gold HDTV didn't, I decided to ditch Virtu, stick with the discrete card and sort the pixelation TV issue.
The AMD gfx card drivers
were only 1 month old, but a newer version was available. I uninstalled prev drivers and installed the new version but no improvement.
I was poking around with HW Info64 and noticed my gfx card was running at x8 not x16 presumably due to the BG3620 being in slot #2. I moved the HDTV card to slot #3 (which let the HD 5770 gfx card run at x16), rescanned Media Center and now I have HDTV with no pixelation.