Haali Matroska Splitter in combination with fddshow gives smooth results with mkv files and the avc codec. well atleast it did for me :)

I might get an ati hd4850 card since i'm also looking at a card that can handle games at high settings and the price is pretty good in terms of it's performance abilities. Thing is the chip runs hot, very hot. Will need a case with good air flow. How's your Silverstone LC17 Blackcase working out for you?