Looks like you're not the only one with these types of issues...
timeheuer.com said:Many are experiencing frame-dropping (I was averaging 5-12 on a 2ghz Athlon 64), and constant vsync tearing. Netflix nor Microsoft seems aware or willing to address this issue, as I contacted technical support only to be told to 'lower my resolution to 800x600' or 'put in a faster processor'.