Been testing watching Blue-RAy + HD DVD rip's on XP + VISTA for the last 7 weeks.

Vista is geared towards HD in a big way if you also have a high end Nvidia graphics card ie the 8800 or 8600GTS your in luck as both run the NVIDIA PureVideo HD off the GPU thus taking the strain off the PC.

Your need a DUal COre CPU above 2.4Mhz and 1GB ram. Ive tested most Software like VLC,windows Media player/media centre ,zoom and have found the latest DivX player 6.4.3 works the best.

Make sure your running the latest Codecs:
Code:
http://www.filehippo.com/download_klite_codec_pack/