Are the video card drivers installed? depending on which card it has its either a Ati card, sis or Nvidia. you can get the drivers for it from herehttp://support.acer-euro.com/drivers/desktop/aspire_t310.html
That is most likely it - the cpu is enought to run video. I have 512Mb on my old laptop and it plays video perfectly I think your going to upgrade this ones memory so it wont be a problem.
Cpu is good enought to play dvd and video.
Video card if no drivers are installed then it will be very sluggish and poor quality. if even after the right drivers are installed depending on what brand and model card it is, it may be too slow or the issue maybe in codec and media player.
try installing FFDSHOW into the computer and see if it improves (it wont help if the drivers aren't installed for the video card so make sure that is solved first) Download ffdshow latest here http://www.free-codecs.com/download_soft.php?d=4786&s=50
(for other users: its the latest version at the time of posting on may 18. check google for new version)
if you need to find out what video card the computer has you can use a program like http://majorgeeks.com/download4181.html
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