As I stated in the bug report I've just send, I'm willing to do more test on newer builds if needed.
So far I've tested it with both the VLC 0.0.7-beta from Market, as well as the Nightly build from the 8th of November.
Software mode runs better by far, having a lot less stuttering compared to hardware accelerated.
Where software plays 720p 'In the tree' video without any problem, hardware mode starts to stutter at 480p+.
No problems audio-wise.