The real problem is in the display adapter hardware themselves which can't be fixed via software settings. There shouldn't be any flickering symptoms with the right software setting.
People who don't have DRM in their recordings (such as recordings from R5000 based tuners like mine) can use any mpeg2 decoder they want for any TV channel. It doesnt matter what mpeg2 decoder is used since they all share the same hardware based video decoding engine done by the GPU. The only way to prevent this from happening in the mpeg2 decoder is if it deinterlaces (or IVTC's) the video with brute CPU-based software decoding, avoiding all of the display card's advanced GPU accelerations capabilities. Many setups aren't powerful enough to do this in real-time, even if there was such a solution from Microsoft. So, it's not really feasible to expect Microsoft to fix the problem in the mpeg2 decoder.
Most PC based display adapters were never tested to work with mixed hard/soft telecined content. They can hardware decode either soft telecine content (23.976fps) or hard telecine (29.97fps) streams; but, not video streams that switch back and forth between both.
It would be best if Microsoft made it a WHQL requirement for hardware vendors to test with this type of video streams before release new display cards. There's a small possibility that display card vendors could offer a fixes in their drivers to handle switching better.
Having said that, I'm currently using the dscaler (IVTC mod edition) decoder which will do all decoding in pure software; using IVTC. However, it's still not perfect. It only has basic bob/weave dinterlacing, so for 59.940fps 1080i video (such as live sports, news, late night TV shows such as Jay Leno, etc), it will have to weave the interlaced frames; losing significant detail.
In theory, I could use LAV Video+MadVR; but then, I would lose all overlay/video effects; and, limited to only full screen; plus, SageTV doesnt allow any custom video renderers.
Originally Posted by Foxbat121
The flickering issue affect not just NVidia but ATI and Intel as well. The problem with WMC is that you must use Microsoft MPEG2 decoder (for DRM) which will freaking out when encounters frame rate switching and reset the video driver. Stuttering is just another behavior of the same cause. Until Microsoft fixes its decoder, all you do at video card side is just work around.