Did you try using VLC or MSVid ? It does seem like something is really broken on your windows install. The choppy video and the issue when playing video in overlay (default) are more than likely symptoms of it. You can check your codec/filters installed with this application.. you may even try to fix it (but I HIGHLY suggest saving a restore point before anything)..
Edit: I also HIGHLY suggest you check/update/reinstall your video drivers.
Cool guino, I will try those suggestions. I have recently updated my video driver. I have headrest monitors, and my old driver wouldn't allow me to clone to them, only extend my desktop. Once I updated the video driver, it worked. I'm not sure if that created the problem, but it might have. I think I will try the program to clean up the codecs, first, to see if that fixes the issues. Thanks again!
Okay guino, I have tried everything you suggested, and still no fix. I updated my video driver, installed the latest Riderunner & installed the latest build of ffdshow. I also ran the utility from http://paul.glagla.free.fr/filmerit_en.htm and it showed 0 errors to my codecs. The video works perfectly with everything outside of RR. Last night, I was playing around with it and got it to work correctly. When I restarted RR, though, it went back to the way it was. I noticed that when in video, if I hit the button to skip to the next track, it looks like it opens another session of ffdshow. When I minimize RR, I have ffdshow icons all along the bottom of my screen. Does anyone have any other suggestions. I tried doing a debug, but I have never done one before. All I get is like 5 lines. Thanks for any help!