The difference with avivo and purevideo is that the card decodes the playback and takes pressure off the CPU. Nvidia doesn't gear it's cards for cinemaphiles, and thus charges for purevideo. ATI's made a rep with All in Wonder cards and TV Wonder cards, so they support video playback by including avivo with every card.
Here's a thread at avsforum that discusses issues with purevideo in XP:http://www.avsforum.com/avs-vb/showthread.php?t=986338
Last April, Driver Heaven compared ATI vs. Nvidia and preferred ATI image quality but mentioned that Nvidia's playback works with Aero enabled under Vista, whereas ATI disables Aero during playback:http://www.driverheaven.net/reviews.php?reviewid=552&pageid=3
I'm not sure if that's been corrected yet, I don't do picture in picture when watching video and I won't have a 24" LCD and Blu Ray drive until next spring, so I watch mostly DVD's and anime fansubs.