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One caution though, on my video card (new ATI 9600SE) enabling the hardware registry accelleration does look great and help the CPU loading, but it causes decoding artifacts. . .
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Hmmm, odd about the registry changes affecting playback on your ATI video card. My video card is an ATI Radeon 9200 and I don't have any similar problems. I'd try updating your catalyst (video card) drivers before returning it. But it does definitely sound like something is amiss there.
Let us know if you ever get it sorted out! But again, I don't think this is an ATI-wide problem since my 9200 (and my 9800XT on my main gaming machine) use this setting just fine.
Edit: Jmcclain's thread detailing his playback problem is located
here
Best Regards,
Hurin