We've had reports that VLC works fine on Beta2.
Yes if you are using Windows Classic theme.
However if you instead are using the Aero Glass which most people will do, then the Aero Glass have to be deactived before the start of VLC. However windows do this automatically and all transparent effects are gone while VLC are running. But each time VLC starts my screens get black for 1 second (while Aero glass is unloaded). Same thing happens when you close VLC and Aero Glass is loading.
You will also get a warning that says "Some visual elements have been temporarily disabled. The reason this is happening is that the following program is not compatible with Windows Vista" when you start VLC.
I have tried this both with 2 computers and the same thing happens on both. One of the is a laptop using ATI 9700Pro graphics card and the other computer is using Nvidia 7800GT.
I hope that my information is helping and I really hope that this will be fixed in the near future. I really want to use the best media player ever released for windows