Flash videos playing weirdly in firefox - malformed

Question

I have had this problem for a long time, running through all versions of Firefox 3 (including the latest 3.5 preview releases).
I am updated to the latest version of Flash, and am running Windows XP (also fully up to date).
All flash videos play fine in IE8.
On some sites, while videos are playing, the picture flicks quickly between a normal picture and the effect shown in the screenshot - the usual image tiny, with weird blurred lines around it. This continues through the whole video, flicking very rapidly, and making the video effectively unwatchable. The effect remains even when the video is paused. I've attached screenshots below which should make the nature of the distortion clear.
I have experienced the problem most on Youtube (as I use this more than other video sites). The only other site I have noted the problem on is facebook video. Metacafe, Google Videos, Dailymotion, Vimeo and BBC iPlayer did not exhibit any distortion.
On Youtube, it is sometimes possible to play videos properly by switching to high quality, but usually it does the same thing, but flicking to a much larger picture, so it only seems to be blurry around the very edges.
I should also mention that embedded YouTube videos play fine on other pages.
My computer is pretty old - with an AMD Athlon Processor 996 MHz and 752 MB of RAM - but definitely has the capacity to play these videos, as it manages on Internet Explorer.
I created a thread on the firefox support forums before I came here - not much progress was made, but I should mention a few details of the only other reported case of this problem.
"Matt" seems to be experiencing the same problem on Firefox, also with a pretty old computer, but on Windows 2000, not XP. He reports the same problem on Opera also on his computer; I haven't tested this on my system.
Personally, I am at a complete loss with this problem - I have no idea how it can be caused, or fixed, and it's a major obstacle to casual web browsing. (I have to load Internet Explorer just to watch a youtube video!)
I really hope someone is able to shed some light on this issue; please ask if you would like any more details on my system.
Thanks.
(Ben)

Answer 1

Hello all,
Yes to follow up Ben, I'm experiencing the exact same problems as him. I changed browser to Firefox 3.0.11 a couple of months ago and hence downloaded the Flash plugin for Firefox. I noticed the issue straight away in Youtube, but not on other sites. As I attributed the problem to Firefox, I then downloaded Opera 9.64 - but experienced the same problem. This led me to believe the issue was the Flash plugin, as both browsers are served by the same Adobe plugin for 'alternative browsers' to IE.
I then tried IE6 again in youtube and it didn't have the problem on standard view, however the problem was (and still is) occurring in full screen view. I'm nearly 100% sure this problem didn't occur before I downloaded the Flash plugin for Firefox / Opera. Regardless of whether that is the issue, the problem was definitely not happening on my system in IE6 earlier this year.
As Ben said, my computer is fairly old but well managed and up to date. OS is Windows 2000 SP4, system is AMD Athlon 900 (slot A), 512 Mb RAM, 16Mb Voodoo 3 graphics, m/board MSI MS-6191.
I've also tried removing the Flash plugin for Firefox/Opera and for IE6 and reinstalling it but had no joy there either. I would try an updated version of IE too but IE6 is the last version compatible with Win 2k.
Any help appreciated, thanks.
Matt