Same problem for me. PowerDVD 5 does work though! I just installed the eval
version and was surprised.
Here's a message I just posted to dvd.software group:
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"Create overlay failed" WinDVD4, Version: 4.0 DXVA B11.030, Dell D400
Latitude laptop
already tried everything from Dell KB article, Why do I receive the error
"Create Overlay Failed" when starting WinDVD?
http://support.dell.com/us/en/kb/document.asp?dn=1058193
installed RS2171.exe - for InterVideo WinDVD update
installed RS65078.exe - for intel graphics driver update
unistalled WinDVD, and re-installed, the re-installed above patch
toggled the video setting of NetMeeting, also verified it's not running
hardware acceleratin is enabled (all the way to the right)
DirectX is running and dxdiag.exe tool says all is well: Direct3D
acceleration is enabled, DirectDraw is not available, nor is AGP texture
acceleration
set display to high color (16 bit) and resolution to 800x600
tried pulling it out of docking station, and retested