Intel HD, 2000 or discrete for video playback

The quality of video playback is going to be impacted far more by the quality of the video encode than the video card. If you try and take some 320x240 video and blow it up to 1080p, it's going to be a blocky mess no matter what you do.

Your choice of video card is unlikely to have any real significant impact on the video playback quality.

Better graphics card will not make the video quality better. I'd get the i3 with HD 2000 and no discrete card.

HD 2000 will do HD videos with no problems

save your money and go with the i3 for hd video playback

Are you kidding,video playback doesnt depend upon GPU.A i3 processor with intel HD Graphics 2000 can handle HD format(1080p) flawlessly.I suggest you to get an 3rd generation ivy bridge processor i3 processor which comes with faster intel HD Graphics 2500.but i am serious that intel HD 2000 will be damn good choice if you are in favor of saving money

I would go with Intel's HD 2500 / HD 4000 over the HD 2000 / HD 3000.

The HD 2000 / HD 3000 has a known issue when playing back video with a frame rate of 23.976 (basically all movies). It's not a big issue, but there have been quite a few people who complains about slight video stuttering. However, most people do not notice it. Without getting technical, it basically has to do with the fact that 23.976 frames per second does not come close to dividing easily into 60Hz (the frequency at which the monitor operates at and the number of times per second the video card / core sends signals to the monitor).

The Intel HD 2500 / HD 4000 graphic core in the Ivy Bridge CPUs have resolved that issue. The problem is that means you will need to buy a quad core i5 CPU to either on of those graphic cores. For your intended purpose I would say a quad core CPU is overkill. Ivy Bridge i3 CPUs will be released in the Fall, but only you can decide if they are worth waiting for.

Thanks to all. Very helpful answers. Will go for the integrated HD