I realized that problem happens when number of threads is > 1 in MPEG-4 
settings. I am using Athlon II X4 630 processor. 
If I choose RTJpeg codec, can't change channel either (error opening jump 
program file), but I guess this is for another bug report.

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https://bugs.launchpad.net/bugs/684428

Title:
  Horizontal picture shrink and lower third blurred on channel change

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