I don't fully understand how the the ATI AIW cards deal with tv-out... or for that matter, how any card deals with tv-out. But I understand it to be related to the "overlay". THe AIW card has the ability to "clone" the monitor to the TV. By selecting "theater mode" (in the ATI control panel), it sends whatever is going to the overlay full-screen to the TV. This means I can leave MC running mini-me in a corner of the monitor and still see the video full-screen on the TV.
This works great, as my HTPC isn't dedicated to the task. For example, I'm typing this as my son watches his Pippi Longstocking videos.
ATI says "Video Overlay allows for the viewing of full-motion video on your computer. However, there is only one video overlay in hardware. For display arrangements consisting of a primary and a clone, the video overlay is only available on the primary display. (For extended desktop arrangements, the video overlay will be visible across all displays.)"
Note that this talks about "displays" vice "monitors".
If you remember, a while back I was asking about something related to this and Hairstyle. The Hairstyle didn't (and doesn't) display to the overlay... meaning that even though the hairstyle is running full-screen on the monitor, the tv shows only the video (and not the hairstyle). A long call to ATI only highlighted that ATI couldn't care less about other applications (they said that theater mode is only guaranteed to work with their [crappy] apps).
The only solution so far is to make the tv the primarly display... but this screws up my LCD big time. So I resorting to using a hotkey to switch... until the hotkeys stopped working (maybe related to Girder, who knows?). I've almost given up. It just about makes someone yearn for MS's MCE - where, assuming you have the supported hardware, everything should work fine! Ok... perhaps "yearn" and "MS" shouldn't be used in the same sentence...
Thanks for the help!