VLC 1.0.0 has frame-by-frame advance (also has instant pausing). It hasn't been released yet however you can try the latest RC build:
http://download.videolan.org/pub/testin ... rc3/win32/
AFAIK you can only go forwards, however can always seek back a few seconds if necessary. To use it press "E" or go to "Tools >> Advanced controls" and press the respective button.
Arite.