cybmole;Thanks for the registry tweak it worked great .A major fix for Vista WMC.
I created a xvid + AC3 file & had the same results as you.
I did take a YouTube .flv & convert it to a .mp4 with Super.Then I used VSO DivxtoDVD I put the .mp4 in as the source file & converted to a DVD VIDEO_TS with the standard .ifo ,.bup & .vob.I put this in the DVD folder I created for WMC to play from the hard drive.It plays this video even though it has AC3 audio.Below are the GSpots of the files.The .vob is the main .vob.