Using Windows 7, I had the 'tearing' problem and switched from Aero to Classic themes a few times, then fiddled around with settings and almost randomly the tearing went away, never found out exactly why, then component failed and on re-install the same problem in fast-moving images in videos - cutscenes in games, streaming movies, etc ... only have the issue now with watching movies and videos from desktop or DVDs ...
Ends up is a problem with Windows 7 synching its 'building' the images with how it renders them ... Windows 7 Aero uses VSynch, but doesn't always get the rendering in time with the monitor's refresh rate, and so some parts of successive images overlap ... sometimes small sections, sometimes across the middle of the screen ...
'Adaptive VSynch' helps with this issue, as rendering is supposedly adapted to the monitor's refresh rate, but doesn't always work ... lessening tearing with 'Adaptive (half refresh rate)', as monitors that run at 60 are more than double the ~24 or ~29 fps of most videos ... Aero is supposed to fix this, but at times mismatched settings between video card drivers and windows can re-create the same conflict and tearing happens anyway ... forcing the VideoPlayer to use D3D Fullscreen settings can prevent this 'multiple renderers each with slightly different settings' from creating tears ...
I use MPC-HC (Media Player Classic Home Cinema) - and VLC, as in my experience between the two there's almost nothing that can't be played successfully (I know, I know: "there is an exception to every rule, except this one") - and found that in MPC-HC going into 'Options -> Playback -> Fullscreen -> 'Use autochange fullscreen monitor mode' helped some, but not fully ... so then I tried 'Options -> Playback -> Output -> D3D Fullscreen' ... message pops up 'This option is designed to avoid tearing, but prevents displaying of context menus and dialogue box during playback. Do you reall want to activate this option?' ...
'Yes' means mouse stays on screen but I can slide it completely out of view to the side ... no on-screen control bar, but keys still work (space = pause, etc) ... 'esc' to exit fullscreen ...
Perfectly rendered videos again ... only the minor annoyance of the mouse and no 'time bar' ...