Problem watching HD movies in my computer

Hey all, I have a rookie question.
I began downloading HD1080 bluray movies lately (mkv files) but my computer can't seem to handle them. it playes very slowly and interrupted. is it a hardware problem? if so, what kind of gpu i need to be able to play these kind of movies smoothly?
(I don't have a HD-DVD or a bluray player)

I have an AMD athlon 64Bit 3800+
Gigabyte Geforce6800GT (256Mb)
512Mb DDR

The main reason your experiencing the issue is due to the amount of ram you are using. I would recommend at least 2gb if using vista and 1gb if using xp. It also depends on what applications you are running at the same time. I reckon If you have nothing else running on xp with 1gb of ram with the most recent graphics card driver then you should be fine. Keep in mind that drivers update on a regular basis so check nvidias site for the latest. Also it depends on which player you are using. VLC uses less resourses than most. I havn't used your graphics card but it is quite old. I do belive this card should play HD fine though. If not an 8400 is a budget dx10 card which will work fine. you can get one for £30