Not sure on the Nvidia driver, you could certainly try the latest stable and see if that helps any, but I'm on the ATi/AMD side of the fence. The latest VLC and Flash player (and therefor youtube) both support acceleration when working with a driver that supports it.
Edit: as of today, if you install silverlight5 you can also get accelerated video on sites that use silverlight (i.e. netflix).
Thanks for the info
Anyways, I downloaded Media Player Classic X64 and in the options selected WMR-9 (Renderless) with both the radio buttons of Direct X 9 checked.
I checked the box for Reinitialize when changing display and Alternative V-sync. VMR-9 mixer mode is checked too.
That may have cleared the tearing issue alittle.
Then i went into nvidia's control panel and found the option for Multi-Display/Mixed-GPU acceleration and changed it from Multiple Display Performance Mode (Default) to Single Display Performance Mode.
Right now I have no complaints but it could be a placebo effect. Will watch my movie further to see if i could catch another screen tearing. It was way worse earlier.
Edit: There is still tearing in VLC.
I guess the settings in MPC is helping with the tearing.