720 mkv files play fine in VLC but not XBMC

Did a bit of searching and came across some threads, but nothing definitive. Hence, the post!

I have XBMC Frodo installed on a Win7 64-bit machine (Q6600 stock, 4 GB RAM, Radeon 3800 series card) with CCCP and VLC installed plus all Windows Updates.

When I try to play a 720p file with .mkv extension using VLC Media Player, it works perfectly in full-screen on my 40" TV with a DVI->HDMI adapter (audio patches through fine too).

However, on XBMC, it severely lags. I've enabled DXVA2 and forced DXVA for Render Method to check, but that doesn't make any difference (negative or positive, it's the same).

Any ideas? Thanks a ton.

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My log can be found here:

http://pastebin.com/gUkWpLxj

Thanks again.