h.265 can get annoyingly heavy, but the better compression isn't coming from nowhere. But for less powerful machines, H.264 works just fine and works back far enough that even I got surprised. Even LGA 775 machines will do that just fine, and h.264 is more or less a constant lowest common denominator.

If it can't play a blu-ray off CPU, then it's either so old that DVDs were the media du jour, or it was never meant to be in a general-purpose computer. They'll do e-mail and Office in a pinch, and they'll play video within their limits, but venture outside for anything else, and it all comes crashing down.