NVIDIA's FERMI architecture based graphics cards with a GF1xx GPU, thus GeForce series 400 / 500, have the latest model 'VP4' video processor embedded, which is actually similar to the one used in the GT220/240/ION2 regarding video capabilities. The VP4 engine now also supports MPEG-4 ASP (MPEG-4 Part 2) (Divx, Xvid) decoding in hardware as an improvement over the previous VP3 engine such as used in ION based systems.
NVIDIA can offload the decoding of pretty much any MPEG format, the only thing not supported is MPEG-1 which I doubt anyone still uses. What is also good to mention is that HDMI audio has finally been solved. The stupid S/PDIF cable to connect a card to an audio codec, to retrieve sound over HDMI is gone. That also entails that NVIDIA is not bound to two channel LPCM or 5.1 channel DD/DTS for audio.
Passing on audio over the PCIe bus brings along enhanced support for multiple formats. So VP4 can now support 8 channel LPCM, lossless format DD+ and 6 channel AAC. Dolby TrueHD and DTS-HD Master Audio bit streaming are not yet supported in software, yet in hardware they are (needs a driver update).
DXVA 1080P videos processed by your GPU The x.264 format is often a synonym with Matroska MKV, a media file container which often embeds that x.264 content, a much admired container format for media files. Especially the 1920x1080p movies often have some form of h.264 encoding dropped within the x.264 format. As a result, you'll need a very beefy PC with powerful processor to be able to playback such movies, error free without frames dropping and nasty stutters as PowerDVD or other PureVideo HD supporting software by itself will not support it. Any popular file-format (XVID/DIVX/MPEG2/MPEG4/h.264/MKV/VC1/AVC) movie can be played on this little piece of software, without the need to install codecs and filters, and where it can, it will let DXVA enable the playback.
DXVA is short for Direct X Video Acceleration, and as you can tell from those four words alone, it'll try whenever it can to accelerate content over the GPU, offloading the CPU. Which is what we are after.
If you watch a movie on a regular monitor, PureVideo playback is great. But if you display the movie on a larger HD TV, you'll quickly wish you could enable little extras like sharpening. I remember GeForce series 7 having this native supported from within the Forceware drivers. After GeForce series 8 was released, that feature was stripped away, and to date it has to be the most missed HTPC feature ever.
Media Player Classic has yet another advantage, as not only does it try to enable DXVA where possible through the video processor, it can also utilize the shader processors of your graphics cards and use them to post-process content. A lot of shaders (small pieces of pixel shader code) can be executed within the GPU to enhance the image quality.
Media Player Classic HT edition has this feature built in, you can even select several shaders like image sharpening and de-interlacing... combine them and thus run multiple shaders (enhancement) simultaneously. Fantastic features for high quality content playback. In the screenshot in the upper right corner (click it) you can see MPC HT edition accelerating an x.264 version of Bounty Hunter in 1080P. Thanks to the massive amount of shader cores we can properly post-process and enhance image quality as well, shader based image sharpening (Complex 2) is applied here.
Download Media Player Classic HC (this actually is free public domain software). The GPU is doing all the work, as you can see the h.264 content within the x.264 file container is not even a tiny bit accelerated over the CPU. Read more about this feature right here in this article.
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