Pixelated/grainy video performance in Parallels 5

Pixelated/grainy/choppy video performance in Parallels 5

I'm running a MBP 3.06ghz and Parallels 5.

I experience pixelated and choppy video (and its sound) in VLC and any other video player. In Parallels 4, I was able to fix this by going 'Full Screen'. This way, the grainy or pixelated video would go as fluidly as if I were running a video on Mac OS X. Perfect, in fact. However, now this solution doesn't work! It's rather annoying and defeats the whole purpose behind my buying Parallels 5 just a few days ago.

I've tried turning off 3D acceleration, increasing the allocated video memory, among other things. Why did the Full Screen solution work under Parallels 4 but now not in 5?

 

This problem manifested itself in Parallels 5 under Windows Vista and Windows 7. However, under Parallels 4, I had no problem with Windows Vista and video playback.

Incidentally, I installed Windows XP this evening and the grainy/pixelated video problem went away. Video runs fluidly in Windows XP.

Oh, life.