Error – Cannot Create Overlay
If you consistently see a Cannot Create Overlay error message, the problem may be with your resolution. Your first step should be to lower the resolution to 800×600 and set the color to High Color.
It might also be that your graphics card does not use a hardware overlay surface. This surface is needed to display video and play back DVDs on supported CPUs.
Without a hardware overlay surface, demands on the graphics card increases and performance may be compromised; even the fastest CPUs may not be able to compensate for the lack of a hardware overlay surface.
Cards that use software overlay surfaces can fail to work or suffer from decreased performance and video quality.