Using VIP suite for Up-Scaling.

This is a clocking problem -- what are you using for your clock to the image pipeline? If you're upscaling to 1600x1200, is the clock you're using to clock the scaler fast enough to generate pixels at the rate required for that resolution at 60hz? Even if it's running a different (faster) clock to the DVI clock, you may still be starving the scaler, as you're waiting for the next pixel. Normally you'd add a frame buffer somewhere.