Barry -
I can't help you with that. Sorry. I've not experienced it.
I do have a PIP issue though, which sorta kinda belongs here with yours. Recently, I made 2 pretty schmicko looking slide shows of both my kids weddings... both using the Cell template. They were hooked up with some beautiful audio and it was all nicely synced.
So - I decided to spice it up with a few PIPs (exploding valentines & stuff) - even better. Previewed the show. Ran like a charm. Made sure it was as perfect as I could make it, then produced it to a video. I made use of the sound enhancement feature (CLVS).

When I watched it back in Windows Media Player, every time a PIP played, the sound went from a full, smooth sound to BLECH! It sounded like an old 78 played on a gramophone. After the PIP finishing pipping, proper sound quality resumed.
I thought it might be a system/setup issue - and that is possible - but it played superbly in PD7 preview.
I guss you know what happened to the PIPS - yep - on the cutting room floor, so to speak.
It's got me flumoxed because I've used PIPs dozens of times without this happening.
Sorry ladies and gentlemen - let's get back to Barry's question.
Tony
Tread gently and you'll hear the daisies grow...