Gazlang, I think you're on to something when you say it's a PCIe issue.
My core is a 3 - 4 year old PC with a fairly old AGP graphics card (not sure of the other details of the top of my head as it's my housemate's PC). We're actually using it as a hybrid, as I use it to play media on our lounge projector. This has always had alpha blending enabled, and I have never seen any tearing. The projector is connected via S-video (PAL or NTSC resolution, it's a big old thing).
I have just built another media centre which is currently in my room, working as a standalone system. It sports a MSI K9AGM3-FIH motherboard, AMD64 x2 processor, 2 Gb RAM, and a nVidia 7100GS graphics card, connected to a TV via S-video also (PAL-I). With this machine, I experience the dreaded horizontal tearing whilst using alpha blending.
I'm no expert, but from what I have read in other posts, I really do think it's an PCIe issue. Has anyone ever experienced tearing using an AGP card? If anyone out there is clever enough to sort this out, and if any extra information about my core machine would be helpful (specs, log files, etc), please let me know. I know this issue can be sorted by turning off alpha blending, and one would assume that this is the reason nothing is being done about the problem, but you KNOW that LinuxMCE looks soooo sweet with alpha blending turned on
I'll be putting up with the tearing for now.