I also posted this in the VersionTracker feedback for VLC. I'm running OS X 10.3.9 on a Quicksilver 867, and VLC 0.8.2 (though the problems also occurred in the previous version and the nightlies I downloaded as well).
VLC has had a fairly long-standing bug in its MPEG 2 decoding code where movies are played at a size larger than what they were encoded at. For example, if you download any video from archive.org, it will most likely be MPEG 2 at 640x480, but VLC plays the video at a "normal" size of 720x540. [If you need a specific example, download the MPEG 2 version of the Three Stooges' "Malice in the Palace". This also displays the wrong duration bug I mention next.] mplayer and ffmpegX also misdetect the size of this video, while QuickTime (with the MPEG 2 component) and MPEG StreamClip detect it correctly. Also, some MPEG 2 videos show an incorrect duration in VLC (the video doesn't play any faster or slower, but each "second" of video displayed in the controller window lasts several seconds). I'd appreciate if you could fix this stuff. VLC is generally pretty good at playing diverse formats, and I like its realtime deinterlacing.
Aaron