Most of the MS API's, .dlls and .exe were left in tact. I did not stop all start up programs. I chose the ones that I could identfiy easily, such as acro reader updating programs, and MS office project sharing programs that I don't use. Now my system is running perfectly.
While I agree turning off 3d party auto start programs can be helpful in preserving extended memory for running intensive programs, and I do so as You said for Adobe, I manually update it My self instead of auto update.
I assure You that no programs preload except MS programs as they are designed to do + My video card driver and Sound card driver and as stated in My earlier post's I have even done a clean boot with minimum items to boot with GUI and the problem persists so it can not be Adobe, Video driver or sound driver making this happen.
Nothing but the OS running in Clean boot.
This is a somewhat known issue read this it you may find it an example of why we have this problem
http://support.microsoft.com/kb/2670838
I am not a programmer nor can I spend Hours upon hours debugging to find exactly what part of this update makes this happen but My guess is that it has a H.264 video decoder as part of the install and it does not agree with My current codec or hardware decoder/encoder.
There are plenty of work around's I coud use like turning off thumbnails and using a 3d party thumb program, or renaming and or encoding the *.mp4 files to *.avi,*.mpg or any other format.
The thing is the OS is there to help me work, not Me working on the OS.