I have found that if I choose slightly different settings, I end up with a jittery signal in Media Center on live TV, and sometimes no sound on live TV. I’ve also managed to break sound completely on my system once by messing about with different options in
At this point you should be able to play a DVD in Media Center or Windows Media Player. It’s using the decoder from WinDVD (InterVideo) but you haven’t actually installed WinDVD. So far as I can tell from reading up on the Internet, what you’ve done is perfectly legal. Besides, you have a right to use WinDVD anyway – it came with your PC, Sony just decided not to let you get at if you want to go the clean install route.