Pixelated video in VLC and WMP player in Windows Vista. Please help!!?

The laptop which I am using is very old. In fact 6-7 years old. The model is Toshiba Tecra S2. The drivers and configurations are the same, which were at that time. However, I recently installed Windows Vista in place of Windows XP. Everything is working just fine except for the videos. They appear too pixelated. Especially HD ones i.e 720p and 1080p. I tried googling for the problem but could not find any concrete solutions. Please help guys! I am in a real fix! Thank you all in advance.