It seems that these days more and more people are using software DVD playback, especially that PCs and GPUs have grown fast enough for products like WinDVD and PowerDVDs to be acceptable solutions.

However, up until now I've always used dedicated hardware MPEG2 decoding boards which made it so that even when I only had a lowly Pentium II, I was still able to play back DVDs with perfect quality at resolutions up to 160 hex 1200.

About a year ago, however, I started seeing a problem that seemed to affect all DVDs from particular studios, such as Evil Angel and Zero Tolerance. At first I thought it was isolated to certain DVDs until it grew to be so consistent that I concluded it was related to the mastering processes used by these companies.
The problem was about Fast-forwarding DVDs at 2x speed displaying a static yet flickering frame instead of displaying the frames being skipped over in quick succession. I raised this problem in the thread below:

https://www.adultdvdtalk.com/forum/topic.asp?TOPIC_ID=35896&FORUM_ID=16&CAT_ID=3&m=

However, the suggestions I got were to try software playback tools like WinDVD and PowerDVD. While WinDVD didn't seem to have this problem, I felt it was completely unacceptable due to the huge quality drop it seemed to exhibit.

So I wanted to explore this a bit more and know what people are using (hardware or software) and whether they're seeing these problems:

My hardware decoder is the "Creative PC-DVD Encore Dxr3" decoder board which does complete MPEG2 decoding in hardware at resolutions up to 160 hex 1200. In reality, it is a rebranded version of SigmaDesign's "Realmagic Hollywood Plus" decoder board (manual at: http://www.sigmadesigns.com/pdf_docs/hwp_man.PDF) The accompanying playback software, which used the decoder board, is also a rebranded version of SigmaDesigns' product. (In case you don't know, SigmaDesigns is a big name in hardware video decoding and they sell professional decoders for MPEG2, MPEG4, WMV, etc.)
The picture is always crisp and amazing (with good quality DVDs) apart from the FFWD issue with particular DVDs.
Among the things this products does is hardware scaling/smoothing of pictures so that they look really good at high resolutions. I even tried it on standalone MPEG1/MPEG2 files (not DVDs) and noticed that full-screen playback of these files using my decoder was significantly better than using Windows Media Player

When I tried to use WinDVD, which doesn't try to use any hardware decoders, but rather depends on your GPU to do some hardware operations and then does the rest in pure software, I noticed that the picture quality just didn't compare. Instead of watching the real "DVD quality" I'm used to, the picture was kind of dark, a bit fuzzy, had some jaggies, and low contrast. I tried a few of their "Movie Enhancement Effects", but they didn't help. It almost seemed as if I was watching a high-quality movie clip downloaded off the net rather than a DVD.

So I wanted to pose these questions here:
1. Is it possible that I got spoilt by hardware decoding so my expectations are much higher than people used to software decoding?
2. Or could it be that WinDVD/PowerDVD have some settings that I'm not aware of that could make the picture look better than the default settings. I have a P3 1GHz CPU(pretty old, I know), so could it be that software playback is capable of much better quality but it automatically drops down to low quality due to CPU speed?
3. Is anyone else using hardware decoding on a PC here? If so, what are you using and did you see the fast-forwarding problem on any of Evil Angel's Jule Jordan releases? (Also Zero Tolerance)
4. Do you know of independent DVD playback software that can detect and use hardware decoders? I'm talking about playback software that is not bundled with a particular hardware decoder. I believe Xing MPEG Player used to do this in the past, but I haven't checked the latest versions (if they're still in business).