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I would make sure, that you have .net fully upto date including 3.5 and the latest directx, also any WMP11 updates there may be, besides any updated drivers\Bios that about all you can do.
Still not sure about Nero as a codec though, might be worthwhile getting powerdvd trial and see if that is any better.
I'll have to give this a shot tonight, thanks for the suggestion Paranoid.
One thing I can't get my head around is why it works fine in Vista MC and not in Media Portal. If I only had a way to tell what Vista MC is using to playback the HD channel and how it is different to MediaPortal I would probably have this issue beat.
On the Nero Codec side, I've tried every available codec for MPEG-2 playback, ffdshow, nero, nero HD, MVP, and windows and they all still have low fps (manifested in stuttering) on HD MPEG-2 livetv channels.