Well, after days of messing around, I solved the problem on my system.
I am running a 680i motherboard with a pair of GTS8800s I also had a 7950 dual DVI card in the third PCIe slot. If I disable or remove the 7950 card I can play video in media player and in media center. I took it a bit further. In addition, if I put ANY pci video (Even a Quatro NVS 440 PCIe 1x card) in the system, I get the same problem.
I removed the 8800 cards, and put a pair of ATI cards in their place, along with my 7950 card in the third PCIe slot, and everything works perfectly. Then for giggles, I put a pair of FX4500s in, and no problem.. then I borrowed my buddys pair of FX4500x2 cards (8 GPUs) and put a straight FX4500 in the third slot, and again, no problem.
I believe the issue (At least in my case) has to do with the presence of an 8800 card with ANY other card in a PCI, PCIe, or PCIR 1x slot.
Not sure if this will help any of you out there, but it worked for me.
regards
J.