EDIT: maybe the problem is introduced by the sleep(1), because a sleep of 1ms gets never achieved in the threading cycle, especially not with "slow" CPUs (I have Celeron E3200 here). Such a sleep would be 10 to 15ms at least! I wonder why the ATOM guys don't have this issue. The actual sleeptime is of course also affected by the runtime of other threads... I go try killing as much other apps as possible...
So, you are watching 1:2 material? (25 fps progressive on on 50Hz for example). Otherwise that sleep wont get triggered at all. Using Sleep(0) is not "allowed", and looping that v-sync position in more tighter loop would get the CPU usage to go out of roof.
3rd party programs should be killed and as well the 3rd party plugins and skins (especially the ones that have some extra plugins...).