Have you installed any video software or codec packs since then? Thank hard and try to remember. One thing you can do is either do a system restore back to when it was good (not that great of an idea), or use the clean tool. The clean tool should remove nero completely from your system, then just re-download the trial and install. It should now be a fresh install. See if you get the same thing.

Or before you do all that, maybe check your video option, something could have gotten changed by accident by you. In Nero Vision go to the More bottom on the bootom and go to dvd video options. Mostly everything there should be automatic. Also what is the source file? AVI, MPEG, MP4? whats the resolution and size of the file?