Sounds to me like the mouse and keyboard are in the wrong ports? i see it happen too often. double check this, the mouse goes towards the middle of the case, i know it may sound stupid but its best to start with the basics.
Have you tried other software decoders? id try a few different players, WinDVD for example! most of them are free to download for a trial period. also itd be helpful to know which VGA card you are using.
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