I went to ASUS and other forums and the talk is that there is a problem with the P5E-VM HDMI motherboard. When playing back HD content the video resolution scales down. Asus is blaming Intel and Intel is blaming Asus. Time will tell but I reverted back to XP and the picture has improved but not as good as I have seen with my previous system.

It's disappointing that Intel still can't get the graphics right. Even when installing another video card the motherboard still has screws up the video. I don't know of another motherboard using the G35 chip so I can't say whether its Intel or Asus. It's OK because I am in need for another computer for business so this one will do just fine. I have learned my lesson, no on-board video ever again.