BTW I just reread your post and came across this statement ...
And I went..... XBMC is not just an interface, its a full video processing, player. How can you expect a player playing an encoded HD video without processing/decoding it. XBMC provides full support for DVXA2 as well, that provides an API for the hardware acceleration and that is done by XBMC itself, same as VDPAU for Linux........ its not just an interface ..... lol and you are asking where I come from ...
XBMC has some decoders built in. BUT its not the one which is doing video scaling and other post processing. It's just passing these on to either the processor or gpu. Its even clear from your own post. It has the API for hardware acceleration. Or DxVA is for doing hardware acceleration. Where do you think that hardware acceleration comes from? Its in the gpu. Almost all the players don't have their own filters to do all the processing. Those are either in avisynth, ffdshow (which are software algorithms and use processor power to do all the processing) and graphics cards own algorithms (hardware based). XBMC is providing an interface and a way to connect these two things together.
If one is not using a dedicated gpu, then all of this is wash. Cause the integrated gpu in most of the motherboards leaves a lot to be desired. That's why a careful selection of components in HTPC is needed. Ask anyone who has built a serious HTPC.