Is there a problem with the specs on the iTunes help page regarding 1080p requirements?
I have Windows 7 64-bit, an i7 quad-core, iTunes 10.7, 16 GB of RAM, NVIDIA GT 540M 2GB, and a 1080p display.
iTunes refuses to play these videos, giving this error:

However, QuickTime will play the videos just fine if I browse and open them myself. So I know its not a hardware problem.