I don't know about vazel's shot above, but note that some guides and bullshots out there use settings that, while looking good in stills, doesn't (IMO) do the quality any favors when in motion (a bit like the horrible 'OMG you can see every grain of sand...' mipmap-settings advice that ran around a couple of years ago).
yeah I'm not really a fan of sharpening. I was shocked when seeing a bluray demo on some big LCD, with compression artifacts and an excessive sharpening post-process that degrade the quality imo.
not everything should be "sharp", and "smooth" is not another buzzword without a reason. things should be "smooth", ideally both sharp and smooth
I use xsharpen with ffdshow, "a subtle but useful effect that not only avoids amplifying noise but also tends to reduce it" to quote its comment, I like it
the other settings I use are deblocking (with 'advanced deblocking' checkbox) and luminance level fix.
no lancos resize, I simply let the vid card overlay do its work, but it's for simple PC use and my PC is not that great. (2GHz Athlon XP. also, the size of the media player window is annoying)
divx movies are greatly improved. I had dvd playback problems and had to use VLC, I actually was annoyed by the quality of raw dvd and missed much the deblocking..
it could be worth quickly trying a linux distro. ffmpeg can do all that filtering I think, it's what ffdshow is based on and what media players typically use.
have your TV well set up. on any monitor I take care of brightness first (black should be black) then contrast (100% or almost on a PC CRT monitor, else something high enough but that doesn't wash the image out, around 70%, that depends a lot), saturation well set up.
a small amount of gamma correction is useful, in either drivers or ffdshow, if it's not proposed by the TV (I don't know the state of this, it's typically not present I think)