I have had this problem in totem and vlc, with vlc only having trouble after it happened in totem. I'm running an nvidia 8800 gts, with linux-restricted-modules-2.6.24-16-generic. I fixed it by changing the video output mode in gstreamer-properties to X Window System (No Xv), but since VLC doesn't use gstreamer, I'd agree with the assessment that this is a driver bug.
I have had this problem in totem and vlc, with vlc only having trouble after it happened in totem. I'm running an nvidia 8800 gts, with linux-restricte d-modules- 2.6.24- 16-generic. I fixed it by changing the video output mode in gstreamer- properties to X Window System (No Xv), but since VLC doesn't use gstreamer, I'd agree with the assessment that this is a driver bug.