Hmmmm. That sounds like a video driver problem, then ... but it certainly looks like your version 2.16c is the latest Dell driver for your Volari.
Sine we last spoke, a newer version of QuickTime has been released. (The latest version number is 7.6.5.) Among the release notes, it mentions that certain display problems have been addressed:
http://support.apple.com/kb/DL837
But what they are describing there is a bit different from your situation (with video not playing well in iTunes).
Perhaps before trying a QuickTime upgrade, it might be best to quickly run a dxdiag on your PC to see if that finds anything amiss.
In your Start menu, click "Run", type
dxdiag and hit enter.
Work through the tabs of the troubleshooter. Are any problems reported? If so, what does dxdiag say about them?