Sadly, VLC is kind of like this. Its too powerful for its own good. I believe there's a certain amount of work going into future versions to try to streamline things, but they really do need a GUI designer to put some time into making a simple but powerful GUI.
I think that what you've said is the fastest way. The thing about VLC is that it does a lot of things, and it hasn't really been designed with users in mind... Recent versions have improved that though.
Have a look at the latest version on
http://nightlies.videolan.org and see if they're any better.