This is how it is. Why is it that you guys think "hardware h*.264 decoding" is some kind of gate logic applied only to H.264 ? Seriously, this idea that somehow "H.264 hardware decoders" can only decode h.264 in hardware needs to die. One simply needs to add a new decoder in the firmware to have the hardware be able to decode it.
There's nothing hard about programmable ASICs. This is 2010 for cripes sake, not 1974.
Thanks for all the info about PNG/GIF!
Regarding video engines, are you sure it's generic and could be updated through firmware? That sounds plausible to me, yet at the same time I can't remember that ever being done...though of course it's possible it COULD be but Nvidia/AMD just don't for whatever reason. I'm not sure if part of...what's Microsoft's Codec? VC1 or something? I'm not sure if Nvidia has ever completely handled that on the GPU, even though they handle MPEG2 and 4 (and it's kind of a moot point since the Microsoft codec isn't as processor intensive as H.264).