I work-around is to use Quicktime to play podcasts and other videos instead of iTunes.
It is absolutely incredible. iTunes for Windows keeps on getting worse! (read my old rant) The UI improvements in iTunes 7 are welcome, but I just tried playing a 320√—240 downloaded podcast, and it totally takes down my 2Ghz Core Duo IBM Thinkpad T60p. Incredible.
UPDATE: this seems to be specific to certain Windows machines -- some play video just fine.
In the little integrated video window, the podcast is choppy. Heaven forbid that you‚€™d want to click on the video to bring it up in its own window. At default size, podcasts run at 2 frames per second, and audio filters in and out. I would have been really embarrassed to release a software product so crappy.
An anonymous iTunes development team member replied, ‚€œuse the Mac version,‚€Ě when I brought up the extreme shittiness of the Windows version. Nice.
The Mac version seems to work fine.