I’m currently using K-lite Codec Version 6.5.0 also installed update 6.5.5
Sw that i use to watch movies are Media Player Classic / Km / VLC, movies starts off well, after 5-6 minutes it lags for a bunch of seconds & resumes back. Lags meaning very very slow. Motherboard installed is Asus m2n vm dvi, Coolermaster PSU 450V, 2gb ram, Windows 7 OS. The problem existed earlier too when K-lite wasn’t updated. What could be the problem?
Graphic card - NVidia 8800GTalpha dog edition
Any graphics card ? Or u use onboard gfx ?
AFAIK its the memory that GFX is using as well as the hardware acceleration. The decoding capability is getting affected due to this. I have the same Mobo and the lag is there, when I connect a dedicated gfx card, ut gets ok with increased onboard ram.
Download core avc codec for mkv files. from CoreAVC 2.0 (for Windows) | CoreCodec it also utilize cuda
thanks for asking dude, i have the same issue ..the vid lags and i have 9600 gt installed 
Try MPC Home Cinema. And make sure PC is not running on Power Saving mode. I had a buggy s/w which came with my motherboard which always underclocks my proccessor. 
@ OP
CPU information dude? Get video card as well as MCP drivers updates. Even with integrated graphics while playing 720P /1080P, i never had any issue on GeForce 7025/50-630a boards.
Just open task manager while playing the movie and monitor CPU usage, if its 100% then that’s the bottleneck.
Try this guide.I used thsi and my crappy 4650 runs full HD movies flawlessly with only around 115 cpu uage
Accelerate x.264 1080p movies over the GPU Guide
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Try this guide.I used thsi and my crappy 4650 runs full HD movies flawlessly with only around 11% cpu usage.