It sounds like D3D9Ex overlay bypasses DWM, allowing non-vsynced rendering & lower latency in windowed mode. A blog post by the developer of VirtualDub:
Exploring hardware overlay support in Windows 7, written back when Windows 7 RC was current:
"Windows Vista appeared to be the end of the line for overlays, as they were not supported in desktop composition mode, but guess what... they're back in Windows 7. As it turns out, hardware overlays are still valuable for a couple of reasons, one being that you can flip them faster and asynchronously from the composited desktop (good for performance) and because you can't capture their image in a screen grab operation (good for the paranoid). And this time, they have a few improvements, too."
Maybe it depends on the video driver, but it would be great if that allows windowed non-vsync with AMD graphics cards. [I can't achieve that on my system with WinUAE's D3D11 mode.] And it could/should work from Windows 7 up. (Not sure about Vista with Platform Update.)