Nvidia 7xxx Series and hardware H.264 Decoding: Fact or Fiction?

Hey guys,

Is hardware decoding of the H.264 Codec supported on Nvidia's 7000 series GPU's?
I originally thought that this wasn't possible, but have seen a few things online for it. Just wondering if anyone here has it working and what steps have to be done to get it working.

Here's my system:
Core 2 Duo E4300 (1.8 stock, 3.0ghz overclocked)
2GB of Corsair XMS2-DDR2-800 (OC'd 833)
EVGA 7800GT graphics
1.5TB Total Storage
VLC Media Player
Output to 1080P 42" LCD via DVI to HDMI Cable

When playing back 720P with everything at stock speeds it will usually drop frames. Overclocking the CPU resolves this, however CPU usuage is still around 50% or so. 1080P will drop frames even with OC'ed.

I will confirm this and post framerate's/bitrates as well as frame drop count for specific clips when I get home.