Currently I'm drawing 848X480@40fps MPEG Layer-3 video with 160kBps audio in regular MediaElement. The UI responses, but it's impossible to do something else in the system.
The workaround was to draw video, using DirectShow directly over other window handler and put transparent WPF window over it for processing. In this case, everything works fine at less then 10% CPU.

You can look into my blog for more information about it