Windows 7 media centre help? Hardware or software?

After spending many nights searching these forums, and trying many of the suggestions, i still have a couple of issues preventing my HTPC being a 'dream machine', and hope someone can point me as to where my problems lie.
I am very happy with the win7 GUI and love the usability and wife friendly ease, but live tv is just substandard. I do have it to a stage where it is watchable, however seems to be dropping frames, slight stutter occasonaly and glitching. I do not know if it is a hardware or driver issue, but please find below my HTPC specs, and the remedies tried upto now, and the results that have been reached.
Lian Li C39 Case, Asus M4A785G HTPC Mobo, (using only onboard GPU) AMD Phenom II 705e Tri core @ Stock 2.5ghz, 4 Gb Ram Crucial ballistix 1066 Ram (4 x 1gb) @ 2.2v, lite on Blu-ray drive, 120gb western digital sata II drive (system), 640gb western digital green sata II (data) Kworld dual tuner PE355T (DVB-T). Windows 7 home premium currently 32bit. HTPC ouput via HDMI to 42LG7000 tv via Sony AV receiver SDR800DH.
I have tried the following and received the results as noted.

• Re-installed Windows 7 32 bit and 64 bit. - Differences are negligible.
• Changed dedicated GPU ram in bios from auto to 512 - made live tv from unwatchable to almost watchable.
• MB Bios is upto date
• Kworls tuners are upto date - from Kworld global site - not microsoft.
• Changed voltage on memory from stock 1.8v to recommended 2.2v - generally improved system.
• Tried latest 9.12 ATI CCC - caused havoc.
• Latest GPU drivers installed - using windowes update facility.
• ATI CCC version 9.8 - only version i can get anything near to live TV working.
• TMT3 Platinum, as Powerdvd 8 that bundled with Bluray drive was poor by comparison.

Any further help will be greatly appreciated, i feel i am at my wits end. I do not really want to start with registry hacks etc, as i hoped the spec above would be ample for my needs which are, live tv, pvr, music, watching blu-ray's, iplayer, tv on demand etc.
If further specs are needed, please ask.

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Antmatz please post your specs..

Update

My specs are

AMD Phenom II 705e 3 cores @ Stock 2.5ghz
Crucial 4 x 1gb Ram 1066 @ 2.2v recommended
Asus M4A785G HTPC Mobo
Onboard HD4200 GFX @ Stock 500mhz core clock
120gb Seagate Sata II Drive AHCI mode - System
640gb Western Digital Sata II Drive AHCI Mode - Data
Peak PCI Dual DVB-T Tuner
Corsair 400watt 80+ PSU
Lian Li C39B Case

Still open to ideas?

First apologies, as I see you did actually post your specs (sometimes I've answered that many posts I tend to 'speed read' and can miss some details).
I don't suppose you've tried the latest 10.1 driver?

Also is it possible to try your tuner in a different slot?