I read somewhere that the newest versions of drivers have video playback issues. While I haven't seen them, I have seen a noticable degregation in video quality, esp. xvid.
In any case, I believe the problem to be drivers. Since WMP looks screwed up and Winamp doesn't, that's almost proof. Winamp doesn't use DX for visuals whereas WMP does. (methinks WMP uses DirectShow?)
Try reverting back to an earlier version of ForceWare or just wait for new drivers.