“Mercury Playback Engine” I didn’t see your card listed under the supported ones, so likely its nothing with that. I’ve nevereditedwith MOD files, so I’m not much help there I’m afraid.
I did a quick search and found you arenot alone with the MOD files. Looks like they need to be converted for better playback and editing.
http://www.masternewmedia.org/how_to_convert_mod_video_files_to/
Hope it helps point you in the right direction.
