Well, I can't seem to find it right now, but try changing the Hardware Acceleration down one notch.
I have a emachines with win xp home edition, p4 2.54ghz, 512mb ddr pc2100 ram, 430W antec power supply, ati 9800 pro 128, cd-rw 48x, dvd-rom, 100gb hd WD, and recently installed a 200gb maxtor diamond plus hd. Whenever I play videos from cd/dvd/file i have noticed that it's choppy and a little laggy. Especially with dvds where the voice sync is off by about half a second. When I play files or movies from cds the voices are better but the video lags when the camera moves around. I usually use BS player but have also tried windows media player 10 and quicktime and the results are about the same. I was wondering if it's due to a lack of ram or possibly an issue within the operating system. thanks!