Sorry, forgot to mention that I'm using 0.7.2 with Windows XP.
It's strange that it should be a DirectDraw problem though, since I don't remember making any changes regarding video playback. Perhaps someone could help us out?
I've run a search on this issue, and found a post pertaining to it. However, it was left unresolved, so I hope it's ok to see if someone has found a solution yet. Every time I play a video file in VLC, it will start playing just fine until I try to resize the viewing window. The video then stretches...