For many months I've been happily trundling along with Nvidia Forceware 163.75 on my Geforce 7600GT. I upgraded this to 178.24, but found iView no better. Surprisingly, I also discovered that the configuration to "Modify Full-Screen Video Options", which I had set to "When watching video content... Also show it full-screen on my: TV" was missing. After checking various forums, it seems this is a deliberate move by Nvidia, and that the option will not be returning.
Luckily, it's easy to revert to an older version of the drivers, so I downgraded to 169.21, and found the full-screen mirroring back in place. It's not obvious from Nvidia's version history when the full-screen mirroring was removed - presumably they aren't going to proudly announce its removal, so all I know is that was removed after 169.21 and on or before 178.24.
The 7600GT is a relatively old model for which new drivers rarely provide any benefit. So, being stuck on an older driver is not a problem. Conversely, newer cards are only supported by newer drivers, so if their owners want full-screen mirroring they are out of luck. Apparently ATI still has this option, so it'll be interesting to see if Nvidia notices that it's at a competitive disadvantage.
Updated 28 Jan 2009: After reinstalling XP I was given 178.x drivers by Windows Update. To get my mirroring back I tried 175.19 (which had the mirror option), but couldn't get TV out to work at all (from forum posts it seems I am not alone). The prior recommended release from the Nvidia site, 175.16, also had broken TV out. I ended up back at my old favourite, 169.21, with mirroring and TV out both working.
While investigating this I found that the removal of the video mirroring was mentioned on the Nvidia support site and in the 178 release notes:
Removed Full‐screen video mirror controls from the NVIDIA Control Panel.