Strange overlay issue with recorded shows-BTV SE

[stalite]

I have Cat's Eye 150 card with BTV4 SE that came with the card. I have tried many media frontends, but BTV seems to be the winner in my opinion. It took a while to make it work though. First, I had to disable ffdshow to see overlay picture (otherwise, you get 'cannot tune to live tv' error message).

After I got it working, I was playing around displays (primary vs. secondary), and a strange thing happened. I was able to watch both live tv and recorded shows in overlay mode on the secondary display (Hitachi 51S700) with a little bit of stutter on fast motion scenes. The CPU was hitting 97-100% in this setup, so I decided to swap the display using ATI Catalyst Control Center. After making the TV the primary display, recorded shows just have black screen with audio in overlay mode. In hardware mode, it works with stuttering (I think my system doesn't have enough horsepower). This happens only with Snapstream codec, and when I change to Snapstream Basic codec, it works. However, the Basic codec gives me a fraction of the screen in Live TV mode. To summarize the symptoms,

with Snapstream full codec:
Overlay gives black screen with audio for recorded shows
Overlay works for live tv
HW works for recorded shows and live tv

with Snapstream Basic codec:
Overlay works fine for recorded shows
Overlay gives a fraction of screen for live tv
HW works for recorded shows and live tv

Due to the system constraint, I would like to stay with overlay. I guess I can keep changing codecs when I switch to live tv and recorded shows all the time, but I would like to solve this problem. It all worked fine with the tv as secondary display, but after changing it to primary, the above problems started to happen. My system spec is,

AMD Athlon 64 3200+ (overclocked to 2.4GHz)
1 GB RAM
ATI 9600XT 128MB AGP

Any suggestions are welcome. Thanks!