i don't know. I've got a dual setup, the 8600 has the same outputs as the 9600. The 2 tuners work drive the 2 monitors/tv's.
There is a NVIDIA beta for windows 7, it installs through windows update. But with me it worked also with vista drivers
Anyhow since the hdmi direct won't be pixelated it's almost impossible to read the screen. You need a dual setup to be able to watch hdmi using a software player. Or you need to find a way to block the hdmi identifying signal so the card sees a generic monitor.
The definition of your movie will the same, if you use hdmi or vga output. VGA can easily transport the signal density.
There is a wiki somewhere on the subject i believe that's informative