I had loads of trouble with PDVD 8 + SageTV + h.264. I am using Arcsoft now. I liked PDVD, but I could not get DXVA2 to work when using the codecs through SageTV. I might check it out seeing that Arcsoft also has a few smaller issues.
Well, I just played around with it some and from what I can tell it can play media files from the hard drive. But the ultra version is the only version that can play BluRay. And of course... No HD-DVD playback kinda sucks.