When I used onboard mobo HDMI & WMC7 there was no problem. Supposedly WMC outputs 16-235 which is what my HDTV was expecting.
Then I added an HD 6450 video card and the blacks were washed out when using WMC7, unless I used the Full RGB setting in the CCC. But then I suffered black crush & lost shadow detail when using other video software.
If you only use WMC then Full RGB (0-255) is OK. But it's incorrect for everything else. That's because WMC will change 0-255 to 16-235 for your HDTV.
Take WMC out of the equation & the PC should output 16-235, so you need to set the video card to 16-235. But then if you use WMC it will automatically change the PC's 0-255 to 16-235. So you end up having both WMC & the video card do a conversion, which creates washed out blacks. In this scenario you need to change WMC to 0-255 so that it will be just like everything else being fed to the video card, and this is done using the registry hack.