Well thought my problem was solved but it's returned. I tested the resinstallation with music files and they worked ok, but with podcasts the problem is still there. Seems to be worse with longer files, and gets worse as playback advances. Or perhaps it's simply more noticeable with non-musical audio.
Here's part of the log from the Messages window when playing back a problem file:
main warning: PTS is out of range (-9000), dropping buffer
main warning: PTS is out of range (-35122), dropping buffer
mpgatofixed32 debug: libmad error: bad main_data_begin pointer
main warning: buffer is 336882238244 late, triggering upsampling
main warning: timing screwed, stopping resampling
main warning: buffer is 336882238244 late, triggering upsampling
main warning: timing screwed, stopping resampling
main warning: buffer is 336882264366 late, triggering upsampling
main warning: timing screwed, stopping resampling
main warning: buffer is 336882290488 late, triggering upsampling
main warning: timing screwed, stopping resampling
main warning: buffer is 336882316611 late, triggering upsampling
main warning: timing screwed, stopping resampling
waveout debug: Wakeup sleeping output thread.
main warning: the mixer got a packet in the past (14512)
waveout debug: will start to play in 51244 us
main warning: buffer is 336882342733 late, triggering upsampling
main warning: timing screwed, stopping resampling
main warning: buffer is 336882368856 late, triggering upsampling
main warning: timing screwed, stopping resampling
main warning: buffer is 336882394978 late, triggering upsampling
main warning: timing screwed, stopping resampling
main warning: buffer is 336882421101 late, triggering upsampling
main warning: timing screwed, stopping resampling
main warning: mixer start isn't output start (5119)
main warning: buffer is 336882447223 late, triggering upsampling
main warning: timing screwed, stopping resampling
main warning: buffer is 336882473346 late, triggering upsampling
main warning: timing screwed, stopping resampling
With some files these warnings appears, with others they don't. I'm testing with normal mp3s...only variable that comes to mind is different bitrates. The ones that cause problems work ok with 1.0.
Also as suggested I tried several different audio output methods, no improvement however.
Seems quite similar to this ticket:
http://trac.videolan.org/vlc/ticket/3749