@Plasma_Snake:
http://forum.doom9.org/showthread.php?t=128616
Try posting your problem here.I too have HD 4850 and win XP but never have this problem or even before with my igp.
Try using some utility to clean all codecs totally from your PC.
Regards to vlc look wether output is through opengl or not if its is reinstall it because with me it goes all crazy.
With MPC you might try to install only player and stuff during installation and install ffdshow tryouts separately.
Also I believe VLC and MPC can never cause conflicts to each other because VLC totally uses its own dlls for playback.