The connection is composite. Haven't had the chance to go get a S-Video cable.

I think its definately FFDShow problem because when I disable FFDShow post processing (disable as in revert back the hack windows Registry), it goes back to normal smooth image.

I going to google some FFDShow tutorials and meddle with other options. Will keep u guys updated.

No I haven't tested dvd or divx post processing.

Yup I hacked the registry to run ffdshow on MCE Live TV. The CPU load never go above 50% usually around 10-20%. I resize to 1360x768.
Yes, I am using Purevideo Decoder. And its definately better than powerDVD decoder.

Yeah, its strange that MCE did not bundle the necessary or basic codec just to play DVD.

XBMC on XBOX rocks!!! All my downloaded videos looks so good on it. Felt very sad when I sold it off to fund my xbox360.

PS: PureVideo it not free but.... can "acquire" from B *cough* T *cough*

You will need a TV tuner card to feed TV/Astro signal into the PC and a graphics card with TV-out to output to TV. Since you are using LCD TV, you can use the monitor cable to connect to your lcd tv if your LCD tv accepts monitor input.

For normal antenna tv and astro to non media center (MCE) windows xp most tv tuner card can do it but if you want to control astro decoder using windows xp mce then you need hauppauge PVR150MCE tv tuner card.

Check my sig for a rough guide.