Windows 7: WMP playback

Hi, guys, first new post here, so here goes..
I always use WMP 12 with CCCP to play all my videos, and it serves me perfectly fine, i like using it and the speed that i can load videos is great.
I'm running win 7 prof, with an i7 930 cpu, and an Ati 5850 gpu.

However, just today, the image quality has taken a real step back. I dont know how to describe the effect, so i've posted screenshots below, i hope you guys can see what i'm on about.
The first one is a from WMP, the second is from VLC, and the VLC playback looks fine, but i'd prefer to get WMP working again.
This effect in all files i've tried to play, avi, mp4, wmv etc etc.



I had this problem before once, but it went away as soon as i updated the graphics drivers. I tried this again, and nothing has changed. So i tried reloading the codecs, and even going back to a restore point before the problem arose, but nothing can cure it.
Any help on this would be much appreciated.
Cheers!

WMP problem
http://i1002.photobucket.com/albums/...philly/WMP.png

How the file did look in WMP, now in VLC
http://i1002.photobucket.com/albums/...philly/VLC.png

Just a shot in the dark, but do you have your GPU set to override application settings?

No, sorry, every setting is on "use application settings", which is the default.
Cheers