ATI and HD content
I got a hold of some 720p HD content over the weekend to see how it would preform on my ATI 9600 using the internal player.
CPU utilization was between 50%-70%. Video playback was very smooth.
There is an entry on the mythtv wiki that I can't find at the moment that has other user experiences with HD content.
Other hardware specs:
160GB SATA HDD
Your mileage may vary, but HD is possible on an ATI 9600 with CPU to spare.