I have exactly the same situation in every respect described in Windmaker's posting. Using VLC 2.0.1 Twoflower w/ DirectX preference. WinXP, SP3 older PC.
Thanks for any advice.
Was really pleased to find this posting and fix for VLC 2.0.1 as I had the exact same issue, but no problem with older version. The Direct X preference worked for me. Using Win XP, SP3 on old PC. Thanks.