I have been successful over the years with XP abd NVDVD. NVDVD stock has been very succesful in presenting a great picture with lots of contrast. It rivals close to a fully configured FDSHOW, Theatertek and Dscaler setup.
In the mean time that the HD DVD wars gets retified you can take a look as WMV HD format on a HTPC. It has been available for the past 3+ years starting with WM9.