This is a pretty new install. I have activated ATI drivers (some reason the post release updates one won't download) and I have VLC. My computer can handle HD videos fine, and they run flawlessly on my Windows partition.
The videos seem to be stuttering, it may not be restricted to HD videos.
Oh yes I was getting bad screen tearing, so I turned the 'tear free' option on.
EDIT: Yeah disabling 'tear free' seems to fix this. But then I'm stuck with screen tearing in the videos?