Yep, that fixed it. I had messed with those settings, but with no idea where to start, I was trying alot of things, and apparently didn't give this setting the focused attention it deserved. OpenGL video output and DirectX video output are very, very close to each other and are far and away the superior settings. After alot of comparing, I think I detect a slightly better picture in certain moments with DirectX video output, but they are so close it is hard to be certain. Thanks allot for your help, this problem has plagued me for months now, and it is great to finally have a solution. Thanks again.
BTW, as long as were on the subject, I would love to pick your brain on one more question. Do you know if there is any way to get the location time-counter to display in real time while dragging the video location (forward/reverse) button left and right through a video? To be more clear, in WMP, when dragging the small button to move forward and backward through a video, the time counter moves up and down to show the exact time location you are at at any spot on the video while you drag, without releasing the button, so that you can drag to an exact location on the video and then release the left click mouse button. In VLC as you drag forward and backward through a video, the time counter remains where it was before you clicked on the button, and only adjusts after you release the left click mouse button, which means finding an exact spot on a video is a process of trial and error, where ultimately you just try to get close to where you want to end up. Do you know of a way to make the VLC time-location display adjust in real time (while dragging the button) like WMP does?
*edit: The picture is so much better now. What a difference!