What is "DxVA" and what does it do?
A: DxVA stands for Direct X Video Acceleration. DxVA is a standardized group of MPEG2 decoding video routines that are to be in a modern graphics processor's video engine. This allows modern video cards to accelerate the most CPU intensive parts of the MPEG2 decoding process, leaving the lesser parts of the decoding pipeline to the CPU. This can also simply be called Hardware Acceleration. For HDTV use DxVA acceleration becomes critical as pure software decoding of HDTV streams requires a 3Ghz processor while only a ~2Ghz processor is needed with a DxVA compliant video card. Video cards that are DxVA compliant include the ATI Radeon family, the GeForce 4 MX and GeForce FX family.

Q: What is "VMR" and why is it usefull? VMR makes things worse why is that?
A: VMR - Video Mixing Renderer - comes in two major "flavors" VMR7 and VMR9. VMR7 was an initial trial, so to speak, of newer advanced video mixing abilities using the 3D pipeline and the DirectX Video Acceleration API, it was only available in Windows XP. VMR9 is a newer, some what different, and improved VMR that comes with DirectX 9 therefore it can work on any system that can install DirectX 9, but VMR9 has more strenuous hardware requirements than VMR7 (VMR7, as you can guess, is VMR using DirectX 7/8 level technology.) For VMR7 You need a DirectX 8.1 compliant card to utilize VMR7's deinterlacing and filtering. For VMR9 you need DX9 installed and recent DX9 compliant drivers for your video card installed. A fully DirectX 9 compliant video card (GeForce FX family or Radeon 9500+) is recommended so that all VMR9 features (specifically, the newer DX9 deinterlacing and filtering) can be utilized; for basic VMR9 support DirectX 8.1 level cards will do fine and some DX7 level cards may work providing they meet some requirements.
Since VMR9 actually uses the 3D pipeline in a graphics processor many more filtering and advanced source/stream mixing possibilities exist. This is considered the next way to display advanced video data by Microsoft, it is intended to supersede the old 2D "mapped memory" style "overlay".
VMR in general should not make things worse, if it it does, the first thing to do is to update your graphics card drivers, this has been known to help greatly; please note that older generation cards may not be fully compatible with VMR9.