I am having a problem setting up a new client. All video played on the client screen is pixelated as shown in attached screenshot.

The problem client equipment is a Shuttle XS35V3 (Atom D2700 + Intel GMA3650 Graphics) driving a 21inch digital TV via HDMI. It is running MP 1.2.3 with LAV Filters on Win7
Problem areas that I have considered are as follows:
1. Shuttle hardware? If I close MP on the Shuttle and navigate to a video clip on the network it plays perfectly in WMP. The same clip when played in MP is pixelated.
2. Shuttle OS? It has clean Win7 installation (reinstalled again after problem encountered). I have not installed any codecs apart from the LAVF.
3. Server problem? Two other clients work perfectly with same OS and codecs.
4. Network problem? Client is connected via an Ethernet-over-Power link. Monitor shows connection speed of around 120mbit/s.
Would be grateful for any help.

The problem client equipment is a Shuttle XS35V3 (Atom D2700 + Intel GMA3650 Graphics) driving a 21inch digital TV via HDMI. It is running MP 1.2.3 with LAV Filters on Win7
Problem areas that I have considered are as follows:
1. Shuttle hardware? If I close MP on the Shuttle and navigate to a video clip on the network it plays perfectly in WMP. The same clip when played in MP is pixelated.
2. Shuttle OS? It has clean Win7 installation (reinstalled again after problem encountered). I have not installed any codecs apart from the LAVF.
3. Server problem? Two other clients work perfectly with same OS and codecs.
4. Network problem? Client is connected via an Ethernet-over-Power link. Monitor shows connection speed of around 120mbit/s.
Would be grateful for any help.