You really need a new computer to run HD-DVD. I had a Dell almost just like your configuration and using PowerDVD 6.5 all I could get was the main menu screen to work. Once I clicked on play movie it ground to a quick halt.
I ordered a refurbed Dell XPS 410 for $700 (Core 2 Duo 2.13) and it plays just fine now on PowerDVD 6.5. Still trying to get PowerDVD 7.3 Ultra to work. Currently all i get is a black screen on it with the sound in the background.
I wish we had a better software player for sure.
Better computer? So I make a test with my Pc from work, Pentium D 3.0 GHz, nVidia GeForce 7300 LE, Power DVD 7.3, XP SP2, connection via DVI to 32" LCD LG non HDCP 1366x768.
Xbox360 HD driver and AnyDVD 6.1.3.0 version (without is not working)!
Play from disk or ripped and play from HDD results the same!
With this configuration the image frame rate sometimes is below the normal, you can watch the movie but some parts espeacially wide angles are hardly processed!
I was check the CPU is stay arround 50%-60%, so should be the graphic card! (I have the latest driver so dont start with that).
From my point of view there is ultra-expensive to go for PC playback of HD DVD. Only a decent graphic card is at least 200€, plus CPU dual core minimum 200€, PDVD 99€, AnyDVD 80€ and soon ...
How is the playback from xbox360, somebody can say something about that? A second hand one is not more than 250-300 € which is much chepper than purchasing all those expensive hardwares!