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If you see more than 5% CPU load, the ATI card obviously does more on the board and less in the driver.That depends, James. The new 8800 GT has been working incredibly well for me. It has the VP2 processor in it and it seems to handle much more hardware wise than the older cards.
I am confident that an old P4 machine would easily play HD DVDs with an ATI card. Can't test it, as there is no AGP version of the 2600...
BTW, the ATI 2900 series needs more CPU power to decode HD video. Strange, but true...