Windows Media Player plays . . . . Windows Media. It can play a few other things on Windows boxes but those usually involved 3rd party plugins.
You shouldn’t be getting blocky dissolves with a “good” encode but you haven’t provide enough info for a meaningful response.
If you’re using Episode make sure it’s 4.4.2.
Compressor (depending which version) also uses Episode plugin as well as Flip4Mac.
I can do WMV HD encodes with either and they both will look good if your data rate is up around that of a typical DVD encode.
I can’t even begin to make suggestions without knowing what he has “Windows Media Player” on.
It should be beefy enough to play WMV HD. As an alternative you could burn a SD widescreen DVD.