I use vlc in my sony ericsson xperia neo v with a 1 ghz single core cpu and 512 mb ram running on stock gingerbread firmware. Here vids upto 480p runs perfectly smoothly but cannot play even very short 720p vids. However mx player faces no problem playing even whole length 720p feature films. I still use vlc because of its beautiful music and video player integration. I wud like to get some features in the future releases of vlc for android:
1.ability to change screen brightness by swiping on screen
2.altering font size of subtitles
3.editing file details (id tags) of audio files
4.download (and preferably ingrate directly into the audio files) album art
5.a back/previous and a forward/next button
6.10 band equaliser
7.(in near future) ability to play 720p vids smoothly in my device as well.