I underline nooberts experiences; even playing other video formats (mpeg2/4, Divx, H.264) worked great with smplayer.
Since I run a sort-of-frugal-installation on my netbook I add bigger packages "on runtime" when I need them.
Since vlc has a massive number of dependencies installing all over the system, the installation from packages held in cache is the only way for this player, taking almost 30 secs to finish.
With smplayer, I could fetch the files in /usr/share/mplayer, add the smplayer files and additional libraries in the same path and pack them to one squashfile.
So if I need a video player, I just click to start a script, mounting the squashfile to /usr/share/mplayer, extending the $PATH to include that dir and smplayer runs like a charm without necessity of having all this in rootfs.gz, resulting in a tiny footprint an boot-time.
Small hint: check audio/video sync in preferences/audio tab to avoid lipsync problems...