I was playing with some of the current Avalon stuff today when I noticed that videos in my Avalon apps were all displayed as black rectangles instead of the actual video content. I was wondering why (this should work just fine with my hardware - an ATI Mobility Radeon 9600 Pro Turbo w/ 128 MB RAM, and DirectX 9.0c installed correctly) when some helpful soul suggested I should update my video driver. Which I did and thus resolved my problem.
So, if you see strange behavior when testing Avalon stuff, make sure you have the latest graphics drivers installed. In my case, it's version 126.96.36.19976 (get it here).