Right. After ALOT of messing with the sinkfile (reverting tons of changes that had happened over the past 11month and battling with bitbake), i think i've finally found the main culprit.
can you please test the attached videosink file. and report whether its better or not. and impact on divx/xvid, mkv, etc movies
If its not,i'll give up for now.
/daz