Several of the decisions Intel made when putting together the platform for its Sandy Bridge processors have combined to result in a bizarre and frustrating situation. One of Sandy Bridge’s most intriguing features is the hardware-accelerated H.264 video encoding capability built into its integrated graphics processor, known as QuickSync video. Since the IGP also has separate video decoding hardware, the Sandy Bridge IGP can transcode high-quality video very quickly, purportedly with relatively low power consumption.

That’s great, but QuickSync video is available only when the processor’s IGP is active and in use. Generally, that means the CPU must be installed in a motherboard based on the H67 chipset, since the enthusiast-oriented P67 chipset doesn’t support a display output for the IGP. On that H67 board, your graphics options are limited, too, if you want to use QuickSync. The IGP must be connected to a monitor; using a discrete graphics card alone will disable the IGP.

For most users with a single display or aspirations toward multi-monitor gaming, that means considerable inconvenience will be required to make use of QuickSync. In fact, we suspect the great majority of users wouldn’t bother.

We didn’t like this situation when Intel first explained it to us back at IDF last year, and fortunately, somebody was listening. In its booth at CES, Intel showed us a bit of software alchemy that untangles things somewhat. The folks at Lucid, makers of the Hydra multi-GPU load balancer, are funded by Intel Capital and happen to have some very nice GPU virtualization technology. They’ve cooked up some software, still in the early stages of development but evidently quite functional, that allows access to both the Sandy Bridge IGP and a discrete graphics card simultaneously on an H67 system.

The demo we saw, pictured above, involved Unigine Heaven running smoothly on a GeForce GTX 480 while CyberLink MediaEspresso transcoded an H.264 video with the help of the Sandy Bridge IGP. Neither task appeared to slow down while the other was running.

Lucid’s solution looks to be darn near seamless. Although we suspect a virtualized GPU might not offer a completely optimal gaming performance, disabling virtualization is apparently as simple as shutting down the Lucid program, with no reboot required.

We don’t yet know when Lucid will have its virtualization software ready to roll, how much it will cost, or how it might be distributed. We understand Lucid hopes to strike deals with motherboard makers to package its software with their H67 boards, but those details haven’t been fully worked out yet. We’ll let you know more when we do.

This is all very good news for prospective Sandy Bridge owners, no doubt. The news would be better if this software could tap into the Sandy Bridge IGP on a P67 board, but Lucid tells us that’s not possible. (An earlier version of this story suggested P67 support was possible. Apologies for the error.)

Given the option to use QuickSync alongside discrete graphics, many folks might just opt for an H67 mobo, if it weren’t for the overclocking situation with Sandy Bridge, in which Intel now has more control than ever. Intel has decided to restrict CPU core overclocking to the P67 chipset. (You can overclock the IGP on an H67 board, which is a little like putting nitrous on a shopping cart.) So you can either have QuickSync video or you can have the opportunity to overclock your processor, but you can’t have both at once. We may not see a solution that offers both types of freedom at once until the release of the rumored Z-series chipset later this year.