Just until two weeks ago I was having no problem playing 720p files (be it MKV or MP4) but I don't know what happened, now suddenly I'm having a problem playing those same files. No matter which player I use, the video lags behind the audio or, in the case of VLC, the video constantly freezes for a second or two.

This is definitely not a codec problem as I had K-Lite Codec Pack Full installed for nearly a year and I was able to play everything just fine. Even so, I tried uninstalling that one, and installed CCCP, and there was no difference. I installed CoreAVC, and there is still no difference.

I'm on a Pentium 4, 2.93 GHz processor, with 2 GB RAM, no graphics card, just an Intel Graphics Media Accelerator Driver. All this was working just fine until two weeks ago.

The problem is so severe that I downloaded this video from youtube, it's in FLV format (but encoding is AVC) and even THAT doesn't play properly, either in Media Player Classic Homecinema or VLC or Splash Lite.

I've checked task manager while playing these files and CPU usage is almost always at 100% or somewhere between 90% - 100% and very rarely does it drop below that.

Try kmplayer:
link

Best player for playing 720p mkv's IMHO

As for your CPU usage.. That's for another board methinks..
That could be a lot of things though, try killing a few tasks that you don't need running...

Can you tell me what board I'm supposed to post this on then? Because I've just noticed that my CPU usage is 100% even when playing a normal AVI file.

The specs of the file I'm trying to play right now:

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ID                               : 0

Format                           : MPEG-4 Visual

Format profile                   : Advanced Simple@L5

Format settings, BVOP            : Yes

Format settings, QPel            : No

Format settings, GMC             : No warppoints

Format settings, Matrix          : Default (H.263)

Codec ID                         : XVID

Codec ID/Hint                    : XviD

Duration                         : 55mn 59s

Bit rate                         : 1 269 Kbps

Width                            : 640 pixels

Height                           : 352 pixels

Display aspect ratio             : 16:9

Frame rate                       : 23.976 fps

Color space                      : YUV

Chroma subsampling               : 4:2:0

Bit depth                        : 8 bits

Scan type                        : Progressive

Bits/(Pixel*Frame)               : 0.235

Stream size                      : 508 MiB (74%)

Writing library                  : XviD 1.2.1 (UTC 2008-12-04)

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Also, I've tried KMPlayer already. It didn't work either.