When running a video in Windows Media Player within a published desktop, maximizing the Media Player window might result in the error "Windows media player cannot play the video as there is a problem with the graphics card " The video plays fine when the Media Player is maintained as a smaller Window. This problem happens only when the Media redirection is Disabled and the video is being rendered on the server side.
Modifying the VM's properties at the Vmware level to increase the video card memory from the default 8MB to 64MB resolved the problem. Customers can experiment with increasing the memory step by step from the default value to determine the appropriate setting applicable for their setup.
The error message seems to be due to lack of sufficient memory available.