Were you able to install the latest graphics drivers for your system?
Try testing above driver and let us know your findings.
I actually replaced the MB with a different MB.. This fixed the issue. Thanks.
You might want to try the IB-1080i-42s bad sample from here.
Captured using stock Win7Sp1 WMC and latest Intel BIOS/Drivers etc.
Note that these bugs occur when using stock Media center as a player. All other chips incl. earlier Intel can playback ok, just not IB