Thanks for the tip. I did have the 2d/3d acceleration settings enabled, but I did not install the additions in safe mode, so apparently they were not working correctly. After installing in safe mode, the driver does advertise support for YUV. Unfortunately, there seems to be some incompatibility with my application as the overlay does not refresh correctly (at all). Sometimes when I resize the window I get a picture, but when I do, it's flipped and the colors are out of whack.
Also, I did some experimenting and found that YUV support was only advertised by the driver when installing the experimental 3d support in additions.