I thought the Purevideo on the 8 series hardware accelerated playback of more than just h264 and MPEG-2/DVD, but I could be wrong. edit: I see what Emulex said. That pisses me off how they remove the best HTPC parts from the high-end cards but leave it with the midrange ones, which for this generation means complete trash cept for HTPC. Cause the newest Avivo on the HD2600 series (and I suspect Purevideo on the 8600 series) sounds pretty kickass as it does much more now than just DVD/MPEG-2 hardware assist decoding.
I'd recommend using something like Media Player Classic. I've tried stuff like PowerDVD before and it makes me sick. In MPC, just go to the options, then External Filters, then add the Nvidia Purevideo codec and it will automatically be used when playing supported codec encoded media (a DVD for example). As said, you know when it is working when the icon in the system tray shows up during playback.
I never noticed much of a difference, and it seemed to screw the aspect ratio stuff up with DVDs that required adjustment in MPC that I never had to do before.