HDMI audio disabled.
I had to implement an EDID override to turn off HDMI audio to achieve sharp fonts on the 32" 1080P TV I use as a monitor. The Invidia Control Panel shows the PC display connector as DVI.
I think the problem might have something to do with the 256MB dedicated video memory...
I have another Atom system with Radeon HD4300 video that renders HD video smoothy.
So I know the Atom is capable. In this case I think it is the Ion portion that is the bottleneck.