It's finally all working.  As per my previous update, i was having HDCP issues.  The Video card i had ordered, the Visiontek ATI HD 2400 Pro O/C had an on-board HDMI port and lists HDCP compliance on the box, but .... it's all lies.  The CyberLink BluRay Advisor tool failed the HDCP test over the HDMI port as well as over the DVI-I port with an HDMI converter.  It's possible i guess that maybe if my TV had a DVI-I port on it and i went DVI to DVI that it would pass, but DVI doesn't carry audio so that's not the solution I want anyway.

Now i did manage to get BluRay to play with the VisionTek card using analog VGA.  That presented two issues, first VGA also doesn't carry sound so it's not the solution i'm looking for and second when BluRay discs start enforcing HDCP which doesn't pass through analog hookups, i'd be down-rezed to 480p which i don't want but today that's not an issue.  So i did manage to play back but i found out the ATi 2400 series cards are only good up to 720p, at 1080p the video playback isn't smooth so that's also not what i want. 

So the short of it is, if you're building an HTPC, don't get an ATi 2000 series video card if you want to run 1080p.  You won't be happy with it.

Looking for a solution to my HDCP problem, i went to the AVS Forums, i knew those geeks would have the answer.  They recommended I buy a 3600 series card and recommended an MSI 3650 with built in HDMI.  A lot of cards don't have HDMI ports, you have to use a converter but then you loose sound.  So the pickings are only a few with onboard HDMI ports an MSI was one of them though i'd never heard of them before so i was a bit worried.  Newegg.com has the card for 75 bucks but there's a $25 mail in rebate so the cost of the card is 50 bucks, not bad i guess.  I bought my 2400 for about that much too after mail in rebate.

So this is what i bought: The

MSI R3650-MD512 OC Radeon HD 3650 512MB 128-bit GDDR2 PCI Express 2.0 x16 HDCP Ready Video Card

So as you can see it's got DVI-I and HDMI plus a good heatsink with fan.  It was a pretty easy install since i'm going ATi to ATi and already had the latest 8.5 catalyst drivers installed.  After a reboot i was in business.  I fired up the Cyberlink BluRay advisor, passed on all lines which is something my 2400 wasn't doing, it was failing the last line which was HDCP compliance.  Dropped in Fantastic Four BluRay and fired up PowerDVD 8, it played !  All great signs but I was still running 720p.  So i adjust my resolution up to 1080p and fire up PowerDVD again, the playback is smooth were the old card was chunky, another great sign.  Last thing i do is open up my task manager and take a look at the CPU utilization.  For PowerDVD it's using 33% and for a system overall, about 50% utilization while playing back at 1080p full screen.  NICE!

My HTPC is finally doing what I had planned.  Still kind if irritated about the false advertising on the Visiontek box.  Safe to say i won't be buying another Visiontek product.