Erm BD movie watching or anything that has been encoded to other file formats can be watched on even a x1950 Pro AGP with the said above specs. Im not sure on my First rig because i dont own a BD Drive
FullHD movies are my passion and I know for sure that any hardware on DDRI causes slight frames losses every 5-10secs (according to buffer size set in codec). Even with Core2Duo. I'm speaking about films which weight above 16GB and when you watch them on big screen it is distinct and annoying. It describes the problem of big latency of DDRI.
Of course buffer size may be adjusted to minimum to have small and stable portions of data transferred and reduced latency. Despite, you'll have delays with processors video decoding -> less but more frequent fps losses.
Talking about high res video the bottleneck appears everything except VGA