Windows 7: Pixelated Video problems on Win7

I starting a new thread because many people have talked about this but I dont seem to find a solution.

I was running windows vista on this computer with no problems, video looked amazing in SD and HD, I decided to install Windows 7 RC and for some reason Video has very mall lines and squares that, even though you are watching HD, distort the image, more noticeable on faces. This happens on every player, even on my slingplayer which is the one that I watch the most. I installed back vista, and everything perfect, but would like to keep windows 7. Im Windows 7 ultimate RC with NVIDIA GeForce 8600M GT with the latest drivers from Nvidia.

Ive tried everything from messing around with control panel to installing codec packs and latest direct x with no luck. Curious thing is that HD from you tube and apple trailers look good!! Can someone help? thanks

Here is a screenshot:

I had the same problem...drove me mad...

I found solutions for VLC and MPC

In VLC set the video output to 'OpenGL' in preferences.

In MPC, in Options - Playback - Output set the Output to "EVR (Vista/.Net3)"

This worked for me, hope it works for you. I think it's a Nvidia driver problem.

thanks for your reply!! I think indeed its an Nvidia driver problem, Ive been reading all about updating to the latest drivers for best video quality and for me didnt work so I decided to go back an install old drivers. Latest drivers for my video card are version 186.1, I uninstalled it and installed old version 179.48, that fixed my problem!!!! Hopefully Nvidia will notice something wrong on latests updates and fix them... thanks a lot!

I have posted several threads with the same issue of grainy and generally just crappy video playback and picture display in Windows 7 since the beginning RC. I too have an 8600 (GTS) and I'm thinking it's an NVIDIA driver issue.

Check out another thread here with basically the same thing (and yet again, no solution):
Video playback problem - Windows 7 Forums

And, my latest thread:
DirectX10 graphics card in Win 7

So, you're saying video looks better/perfect since you went back to 179.48?

And found this, too:

Poor video quality - Windows 7 Forums

This is quite ridiculous there are this many threads about it with no known fixes.

Bump for something/anything.

WMP 12 + Shark007 codec pack

or

VLC 1.0.3rc (fixes issues with Windows 7)

Neither of those address or fix the problems happening here.

Shark codec is a good codec pack(with witch i haven't had any of these problems) and VLC 1.0.3 fixes the problem of pixelizaton.

So yes it has to do with your problems.