That could be it. Are the server CPU's newer? Post Nahalem? Also what is the client access device? That will make a difference. with tweaks made between 5.0 - 5.1.1 you should be able to get good host rendered playback @ 720P and even 1080p. Some are happy with fullscreen. But there is still some work to do there.
Another factor is if its a 3D enabled desktop. You will get lower video performance with 3D enabled.
WP