Yep I know have fullscreen in KDE . I have been waiting almost a year for this bug to be fixed (I ran into it last June when I switched from x86 Gentoo to amd64).
I can confirm that the fix isn't working either. I'm on 0.86-bugfix and I have no difference. I wish I could jump right in a fix it, but I'm not familiar with VLC or X at the code level.
I think it's a release of 0.8.6a that includes a bug fix for a DOS exploit. Here is what it says on packages.gentoo.org vlc 0.8.6_p18636 Fri Jan 26 19:52:35 2007 Description: VLC media player - Video player and streamer Changes: *vlc-0.8.6_p18636 (26 Jan 2007) 26 Jan 2007; Diego Pettenò (flameeyes) ...