MPEG-4 Part 10, better known as H.264, hardware decoding has been somewhat of a sticky issue for NVIDIA over the last year or two. The feature had been claimed on and off on various products which left users with uncertainty. With NVIDIA's current drivers, version 81.98, not only is H.264 hardware decoding missing (could you tell from NVIDIA's website?), but video playback is actually broken in some situations. I use a Dell 3007WFP display and during hardware playback, if the video is enlarged beyond a certain size or maximized to screen, there are visible vertical lines that litter the entire video image. This does not seem to be noticeable on other displays but it appears to be a bug with the WQXGA resolution (2560x1600).There is a new driver release on nZone that lists H.264 as one of the hardware acceleration features that is now enabled. The feature has been tested and appears fully functional as claimed. The issue that I witnessed with the current drivers in regards to video playback and vertical lines have also been resolved.
A few review sites are already starting to crack into the performance of the new drivers, you can see one of the first reviews care of PCInpact.com here (or translated to english).