The latest beta of Windows 7 blocks the usage of third party video decoders from Windows Media Player and MCE. Albain, a DirectShow (ffdshow) developer explains in his own words what he encountered when he was testing the multimedia pipeline of Windows 7 in the latest build 7057. Here's how a directshow developer lays it out:

Hi, I am a directshow developer (FFDShow Tryout to be more precise), and I have spent (lost would be a better word) a lot of time to understand how the multimedia pipeline of Windows 7 is working agains the previous versions of Windows.

Bad news : 1/ Microsoft has locked mpeg4 and h264 codecs into Media Foundation, the replacer of DirectShow (even if directshow is still supported).
2/ There is no way to override those codecs, even if you develop a Media Foundation version of your decoder, because Microsoft maintains a list of preferred codecs (their codecs) into the registry (HKEY_CLASSES_ROOT and HKLM \MediaFoundation\Transforms\Preferred), and this registry key cannot be modified, even in admin mode. Only TrustedInstaller user can modify it, which is FYI the user that protects system files, and it cannot be used.
3/ I have done my tests on build 7057 which is close to release candidate, so few chances that things are going to change till release version.

Microsoft brought those new codecs (which is good news for end user) but blocked the possibility to use alternate codecs in their applications. t reminds me some cases with Internet Explorer vs Netscape...

I don't know if you guys are aware of that, this is very annoying, I find that your decoder is the best in the market and as a Media Center end user, I see no hope for the future...

Some people would argue that one uses another player, but today windows media center is the most advanced solution for many uses. Just wanted to share this with you

Regards, Damien Bain-Thouverez

Which means basically that Microsoft has "blocked the possibility to use alternate codecs in their applications," according to the developer, so you couldn't use them in Windows Media Player or Windows Media Center.