VLC v0.8.6c broken "Always on Top" Support in Vista

[12Iceman]

After I installed VLC v0.8.6c on Windows Vista 32-bit, the always on top feature no longer works properly. When watching a movie in full screen mode with always on top enabled, there is a blank VLC box on top of the movie. This problem did not exist in VLC v0.8.6b.

[robomojo]

It is broken on XP Pro SP2 as well.

1) Start VLC
2) Enable "Always on top" setting (or make it default in the preferences)
3) Play video
4) Switch to full-screen mode

result:
Video is indeed played at full screen, however the VLC window (which is now empty) remains on top of the video being played.

expected results:
Video should be full-screen without the VLC window above it.

workaround:
Disable "Always on top" setting prior to using full screen mode.

[Liquid_2003]

Same problem here...