Regarding using svn, svn does not necessarily get the latest version. You can tell it to get a specific revision, i.e. it acts as a time machine. see: http://svnbook.red-bean.com/en/1.0/ch03s03.html
if you have a fast net connection, you can download the ubuntu dvd's, then use them as local repositories using apt-cdrom. but while you are at it, better download the debian dvd.
a deb package just for vlc is worthless, this is not as easy as in windows; because there are many dependencies. see http://packages.debian.org/stable/graphics/vlc to see how many dependencies you actually need. you
Well, it is just that sarge is the old stable now and etch is the new stable. so, expect to receive less or no updates for sarge in the future, that's why. of course if that's a mission critical machine and dont want to risk, that's ok.
I don't remember actually, X11 probably. Just try all of them. One more thing: I think the problem had started when I tried the ATI's proprietary drivers, changing back to xorg's might have solved it either.
In my case, it would segfault with other players as well.
When I said vlc was in sarge, I meant that it was in the sarge repositories. Comment out the Videolan repositories, do an "apt-get update", then "apt-get install vlc". And honestly, you should be upgrading to debian etch.