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Hi Lee,
I downloaded your 00018.mts file and played it with no problem with PD8 on my system. because I am set up to process PAL standard and your file was NTSC PD8 automatically converted it - it played like a treat. Looking at your DXdiag file I see your machine has onboard Intel G45/43 graphics. Your driver is out of date - 6.14.0010.4977. The latest drive on the INTEL site is 6.14.0010.5284. The Intel site talks about problems with high res on the older drivers. I should update the drivers.
Hope this helps,
Don