This post is actually devoid of factual content as it stands. Please don't take it as an insult, read on:

Media Player Classic uses codec decoders you have installed on your PC, VLC ships with everything it needs to play your videos. In other words, you should not be comparing VLC to MPC, but rather VLC's underlying codec library (from ffmpeg, I believe) to the active codec decoder being used on your Windows machine.

For example, I too use MPC on Windows to get better video - but that's because I have CoreAVC installed and MPC uses it to play h264 content. CoreAVC blows everything else out of the water in terms of performance and quality.

What codec are you using on Windows w/ MPC?

Media Player Classic does have it's own video renderers, however, which are responsible for scaling and colour conversion. It also has FFmpeg built in to decode some more popular formats without relying on system codecs.

The washed out colour in that screenshot can probably be fixed by changing the video output method (to OpenGL/Direct2D/Direct3D) or changing the default luma range in the graphics card settings from 16-235 to 0-255.

It's probably the luma range. I remember having this "washed out" color in KMPlayer and wondered why VLC's picture was darker.

I'm not sure, but as an end-user, I'm comparing the two players on the out-of-the-box results I get when playing video. If VLC's codec library is inferior to the one on my Windows computer, then I won't use VLC unless I could easily import my proprietary codecs.

H264 (the decompression standard implemented by VLC/ffmpeg and CoreAVC/MPC) has well defined output in YUV space, and up to +/-1 pixel values in RGB space.

The differences you have captured here indicate that at least one of them is applying non-standard filters of some sort. Perhaps it's just a matter of the right settings (though I cannot offer help in determining what they are)

So, I don't really the difference, except that your video colors are wrong. Change them in the control panel.