Glynor, just out of curiousity, what version of ffdshow and Catalyst are you running? Also, what MPEG-2 decoders do you have loaded?
Drivers: Catalyst 8.01. CCC installed, but not loaded in tray. ATI Tray Tools is installed, Hotkey Poller is being killed on boot. VPU Recover is disabled, and the "advanced settings" are generally set following
these guidelines. I upgraded immediately to 8.01 because the 3850 wasn't fully supported by 7.12 (and needed it's own "special" driver).
Deinterlacing: Auto is unchecked. Slider is set to Vector Adaptive, and Pulldown Detection is enabled.
Display notes: The display is my primary/only display, set to 1920x1080 (its native resolution) @ 60Hz. Connected via DVI-HDMI adapter. Sound support in the 3850 is (for now) disabled.
Decoders: CCCP 2007-07-22 (I actually just now saw there is a new release out). No other DVD Decoders are currently installed, though I'm probably going to bite the bullet and pick up the Nvidia PureVideo decoder or the Cyberlink DVXA-enabled decoder. For most of my MPEG-2 decoding currently, I'm using either CCCP or the Snapstream SP Decoder included with BeyondTV (which is really probably 90% of the decoding I do since I don't watch DVDs effectively ever).
One question... Did you read some of Jmone's postings about refresh rates and judder from a while back? He too lives in PAL-land and had trouble with Judder. He was able to fix it by running the display at 50Hz most of the time, but manually switching it to 24Hz when playing film-encoded DVDs. I still strongly suspect that this might be overkill... Running the display at 60Hz or higher all the time (if possible with your set) all the time might actually help solve the problem. It might not though, and many PAL displays don't support anything higher than 50Hz.
I always used the ATI Cyberlink decoder in the past, but since I rebuilt the HTPC and gave up my old AIW X800XT card, I can't use it anymore (it won't install with the 3850 annoyingly -- even though it would with my X1900XT card). So I'm currently torn on what to do...
EDIT: I'm also unclear on if I already have an ATI Decoder installed as part of the AVIVO package. It looks like (according to a bunch of posts over at AVSForum) maybe it is an MPEG-2 decoder, but not a DVD Decoder. I plan to investigate this further, but haven't gotten there yet...