I've just implemented this feature for the next major release. It isn't decided so far, whether we will backport it to the 2.0.x series or not. You can fetch a
nightly build to give it a try.
Note that the experience is a bit limited at the moment. To enable the minimal mode, go to the "Video" category of VLC's preferences and uncheck the "Window decorations" option. Click save and restart VLC. Switching the modes on the fly isn't supported at this point.