Every time I reinstall Windows, VLC works for a few months and then this bug appears that makes it completely unusable. When in fullscreen mode, the mouse cursor has to be visible overtop of the video, or it won't display correctly. It just shows one row of pixels repeated down the entire screen like this. If I move it out of the video area (to the edge of the screen where it's not visible, or onto a second monitor, though it happens with only one monitor too), it does this. If I just leave it sitting there on top of the video, after a few seconds it disappears and this happens anyway! Hardware acceleration, overlay on/off, DirectX, OpenGL, hardware YUV, triple buffering, different interfaces, none of the options seem to have any effect on it. Happens with every video, DVDs, every output module, etc. The only way I've ever got it to stop doing this is to reinstall the entire OS and I don't really feel like doing that just because one program is broken.
OpenGL output is also broken in another way. Not only does it do that, but the output is 640x480 in a 1280x1024 black box in fullscreen mode.