While Fudo proved Blu-Ray was not a problem at all, we though it would be nice to test if this is the case with files. As already proved a XVID or DIVX encoded movie in DVD quality is not even a problem for any Atom CPU.
At 720p resolution the CPU load did not change.
Surprisingly even 1080p did not impress the Ion at all.
All the tests were done with ffdshow and Media Player Classic Homecinema Edition. As long as you enable EVR output which is unique to Vista and Windows 7 all runs smoothly. If you change to DX9 renderless output the CPU load increases heavily, but 720p is still playable.