3 years old and a laptop? I'll take the liberty to confirm your video card doesn't do DXVA. So you need to use the CPU for decoding, which if it isn't a fairly strong CPU can be a bit taxing on it, which causes your overheating problems. You should probably be able to run 720p files normally but you need to have it set up properly.
Here's what I can tell you to do on Vista, on Ubuntu, I can't help you.
1. Uninstall absolutelly everything that's connected to video playback, meaning any codec packs or programs.
2. Install
MPC-HC
3. Install CoreAVC for decoding(it's good for older CPUs) (I can send you teh cracked version)
4. Install Haali Media Splitter.
5. Open MPC-HC and go to output and select EVR Custom Pres. as your renderer
6. Go to External Filters and add the following and set the "prefer" option:
- haali media splitter
- CoreAVC video decoder
And that's it. You should be able to run MKV files normally...if it still lags, I'm afraid your CPU isn't strong enough to play HD files or something is fucked up.