Some files have errors in them or aren't encoded particularly well. Some hardware and software is simply better at error correction than others. Some have better decoding capabilities. My guess is that your computer and software, likely being much more powerful than what our wonderful, lil' ol' N7 has to offer, is able to overcome the shortcomings of the file. If it's not a faulty file or encoding, it could just be a section with a very high bit rate that the N7 doesn't have the horsepower to overcome.
For kicks, assuming it doesn't make you stray too far from lazyville, you could install another media player like the free BS Player, which I use sometimes. Maybe it can overcome the problem area. Maybe not.
Or, if a friend has an iPad (gasp at the thought), try it on that to see what happens. That won't solve your problem, but if it works on your friend's iPad, it will at least make them feel better about owning an iPad, because we know those Apple owner have such low gadget-esteem.
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