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For hardware accelerated h264 playback, you can use the stand-a-lone mpc-hc codec. http://mpc-hc.sourceforge.net/DXVASupport.html I've had great success using it with MediaPortal.
I own PDVD9 Ultra, and you can't use it's h264 decoder outside of PDVD9.
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If not, you can always use the free program eventghost which has PDVD support and allows you to map any remote control buttons to various PDVD functions...
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I'd agree that the latest updates have greatly improved the situation, I find that I still require PDVD8 to be installed due to still unresolved bugs in PDVD9.
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You're HD TV is typically 720i. I read an article a while back that said that most people can't distinguish the difference between 720 and 1080 when viewed on displays smaller than 46". I can easily notice the difference between DVD quality (480) and HD (720). But I'd disagree with the notion that 1080 is FAR better than 720 on a smaller display.
I own PDVD9 Ultra, and while there is a non-linear stretch option, it doesn't get rid of the black bars you're talking about. There are also some TrueTheater stretch options, but they are all greyed out for me as well.
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It takes a while to setup, but it can be done. Use Media Portal for a media center rather than windows media center. Media Portal can auto-mount iso's when used in conjunction with another program called Virtual Clone Drive. There's a Media Portal plugin called moving-pictures that you can use to manage your BD ISO library. There's a guide on the moving-pictures web site that will tell you how to configure it to use PowerDVD as an external player.
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I received a reply from my support request. This issue is a bug, and they hope to have an update for it shortly.
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I've got the same problem with nVidia 9400 graphics and Realtek 885 audio chipset. Both are officially supported with the latest drivers. PowerDVD won't pass undecoded audio on to my A/V receiver over hdmi. It changes the audio output settings on it's own and then decodes it itself outputting crappy 2-channel sound.
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