Reinstall the drivers. Hopefully there is nothing wrong with the hardware. You might be able too, most video cards come with software adjustments, so you might want to check in the advanced display properties for "overlay" adjustments and see if any of those adjustments help (if they exist).
Also can try in windows media player turning off hardware accelleration and see if that helps any. This will force the software to not use overlays. Obviously you want to use hardware accelleration and overlays in the end, but for troubleshooting it's worth disabling and checking what happens.