THX says their test signals are unique, though, because they’re equal to the final reference levels set during the individual DVD’s mastering. This supposedly means you can tailor your system’s performance to each specific DVD title that has the Optimode stuff encoded onto it.

Source: http://www.technofile.com/articles/thx_optimode.html

Seems to be true. It's a by disc calibration, not absolute for your system.

I agree you shouldn't use any DVD decoding software to view optimode. Mostly because NTSC black levels are 16-235 (which some software players will output. PC monitors are 0-255. So your black and white levels may be miscalibrated to these levels, or worse, the decoder may use some adjustment/filtering to "improve" playback in a random way.

Forget Optimode, it's not useful for much of anything, and I would certainly never use it for a PC.

Use http://www.normankoren.com/makingfineprints1A.html#gammachart, quickgamma or similar calibration software to set the right levels for an RGB display, not software for YV12/NTSC video.

Btw, Blu-Rays are also 16-235 levels, so even though HDTV and BD have more vibrant colors, a BD Optimode would be just as inappropriate.

As far as overlay vs desktop color schemes, you don't need to take that into account if you are making your adjustments in your monitor's controls instead of your PC's software.

Finally, I'm not certain that overlay has separate settings, I know 3D graphics have different gamma corrections versus 2D (desktop). If your software player uses DirectX for rendering, than you might be effected by that distinction.

Edit: That all being said, it's why I used the method that I do for making adjustments to video. They are based on absolute numbers and/or comparison to other sources, not my eye which may be just as inaccurate as my monitor's calibrations.