I would like to report some tearing without any effects, using Xvideo with vblank sync is enabled. But tearing doesn't happen too often. It seems like it might have something to do with thread scheduling or so. (I don't know true reason, this is just a guess). When computer is heavily loaded it happens more often.
It also might be kernel problem. Ubuntu 64 bit 7.10 with VLC 0.8.6c and Nvidia 7600GT with latest drivers.