That's because VLC is not using GStreamer. If you want hardware accelerated video playback where the mx51 VPU does the decoding, you have to use something based on GStreamer (like Totem).
Intresting :) I tried that, and while it did play videos better the system became so slow as to be unsable as totem pulls in a *lot* of gnome dependencies. Windows unfreshed, long loading times and at one point the whole system locked up because it was being slowed down so much.
I also tried "parole" which is XFCE's video player and uses gstreamer. Though it won't play any videos, just crashed with a "failed to create output image buffer" message.
Things have changed a bit since this thread was first posted. take a look at this wiki page instead.http://library.powerdeveloper.net/index.php/Debian
Thanks for that :) I did not see that before. Video playback was still slow after following the instructions on that page though. Did some more digging and found this thread - ( viewtopic.php?f=7&t=2293
) which makes a suggestion to use an xorg.conf file (and imx-essential) while it makes a small improvement on video playback (so long as you're not doing anything else!) though it ruins audio output though weirdly only on VLC , which becomes distorted (I also tried mplayer which was unaffected).