on this page, you'll find an explanation of what post processing does:
http://nickyguides.digital-digest.com/DivxBeta.htm
[it's related to an old divx version, but the principles don't change; look for 'Default decoder postprocessing level' in the page to find the interesting part.]
basically: the highest the post-processing level, the better the picture (to a certain extent of course) but also the hardest the CPU charge required.
If you have a slow processor, you should probably set the post processing to a low level
post processing is done by the decoder (in your case, ffdshow). you can set the post processing level in ffdshow itself.
also bsplayer offers some shortcuts to increase/decrease the post processing level in ffdshow (meaning: bsplayer tells to ffdshow to modify a parameter; but the post processing is still done by ffdshow)