I know this behavior. I had report the problem in an older post.
It happens, if your mpeg file is somehow corrupt. (In the older post I had explained the likely reason: MSP has problems to go backwarts in the file.)
Solution:
1) MSP behaves better, if you have the service pack installed.
2) You can use an mpeg to avi converter and then load the avi file into msp. Then use msp to convert it again to mpeg if you need.
For this task I used tmpgenc. (I used a demo version, but because I was so happy that this worked, I bought a licence.)
Since video players never need to position backward in a video file, they do not have problems. They simply skip bad blocks. May be even, that the file need not be really corrupt, means may be its format is totally legal, but it has an unusual gop-size (e.g. very very large) to cause this problem.
