Apple :: Why Can I Not Play HD Video

This is the bane of my existence.
System 1: HP DV4
AMD Turion 2.1GHz proc
4GB DDR2 Ram
WD Scorp BLue 250GB HDD
A really good dedicated Graphics card, could play Civ 4 at fairly high settings, 1280x800 no problems.

Now I tried to play the ESiR rip of Saving Private Ryan, no juice.
I tried it in Win 7, nothing, I installed Win 7 RC1, still couldn't do it.
I'm talking a new installation, no software, just VLC.

NOW, the funny thing is my friend, on his Black Macbook (2.4GHz, 4GB ram, bad Intel Int GFX) can play blueray rips PERFECTLY, while doing a million other things.

SO I buy his laptop because he upgraded, install a fresh copy of OSX, and guess what? It still dosen't play (although the hardware is 1000x better than HP's) I don't understand why VLC uses ALL of my CPU, and when I close EVERYTHING, and restart finder 8 times because I can't close it, the thing still stutters. I can watch stuff, but it will freeze on a frame and stutter.

It's not just private ryan, I have Terminator 2, 3, 1, and a lot of other movies.

I've tried quicktime, Realplayer, Nice Player, VLC, WMP, ect.

My friend says it might be the MKV file container, because when he was playing them on his brand new uMBP, they went fine, but he couldn't skip through the video without it glitching (pause and unpause to shake off the 'blocks'). I've never really been able to skip through a video without it hanging or getting the 'blocks'. Even a 10mb AVI sometimes gives me issues. He said it was a bad rip because he couldn't freely 'scroll' through the video.

Could this be some hardware issue?
720P AVIs do seem fine, but everyone puts their stuff into MKV. I thought MKV was better than AVI.

If I convert these into H.264 or something, will that solve the problem?