Hi kr6942, please check this article, it may help you troubleshoot your issue.
The Slingbox Answers Forum Moderator Team
No hardware acceleration on my Windows 7 Machine.
If you go to the Player options, you will probably find the option to setup hardware acceleration grayed out.
This is affecting playback greatly at my end (very stuttery).
Also your videocard drivers might not be optimized for Windows 7. What videocard are you running?
I am running a Nvida 6600 GT. With the latest drivers for Windows 7, the thing would not even run. I had to use older drivers as the compatibility with windows 7 has been compromised in the latest releases.
I've got an NVDIA GeForce 9600 GT videocard. I'm using the OEM drivers for it. I ended up setting the (dual monitor) display resolution as high as the card would support. Of course this had the appearance of making the default Slingbox window appear somewhat smaller; but, the picture quality has now improved to acceptable+ and is only very slightly choppy.
So, I haven't really changed anything about my system - just made enough adjustments to try to compensate for apparent shortcomings in performance.