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By the way, as far as reproducible, we've been able to make it happen 5 out of 5 times...same progression every time.

I don't want to be a "me too" guy, but I have the same issue. We finally watched it happen using "top" --VLC started and operating normally, using about 2.8% of 2GB of memory --After about 5 minutes, it grew to 3.8%--still operating normally. --After about 20 minutes of watching ...