Did you try updating all the drivers (ATI Radeon, chipsets AMD SB700, on board audio, etc)?
Did you follow the manual, page 22:
Playback of HD DVD and Blu-ray Discs:
In order to get better playback quality, when playing the HD DVD or Blu-ray discs, refer to the recommended system requirements (or better) below.
â€¢ CPU: AMD AthlonTM 64 X2 Dual-Core processor (4200+ or above)
â€¢ Memory: Two 1 GB DDR2 800 memory modules with dual channel mode enabled
â€¢ BIOS Setup: [B]At least 256 MB of UMA Frame Buffer Size [/B](refer to Chapter 2, “BIOS Setup,” “Advanced BIOS Features,” for more information)
â€¢ Playback software: CyberLink PowerDVD 7.3 or later (Note: [B]Please ensure Hardware Acceleration is enabled[/B] )
Are you connecting to HDMI? What is the monitor/tv?
Which SATA port connected to? The SATA port configured as Native IDE, Raid or AHCI? Maybe try connecting to SATA2_4 or SATA2_5 and set as IDE?