portable DVD / VCD player smoothing issue

MS brought in a portable DVD / VCD player for consultation. It was a circular disk around an inch thick, the size of a DVD, with a 3 inch LCD screen on top. Apparently he was trying out some settings and from then on the video was just coloured blocks. Went through the menu system - while displaying the menu the screen was fine, so it was not directly a display problem. Under video settings or something, found a Smoothing option which had been turned on. Turned it off and voila! The video renders fine. Probably the smoothing doesn't work for VCDs?