As your laptop model is “DELL Inspiron 17R-5720” it should have “Intel HD Graphics 4000” graphics adapter. This hardware should be more than enough to play 1080p videos and therefore problem is most likely with the driver (piece of software that makes it possible to use certain hardware).
From the output for
sudo lshw -c video we can see that the driver installed for graphics is the open source driver (i915) that was installed automatically with Ubuntu. As you are experiencing problems with this driver you should try alternative one that you can get directly from Intel:
“Under Linux Graphics Installer” choose either 32 or 64 bit Ubuntu version according to what version of Ubuntu you using. I know it says it is for 13.04 but let's hope it works also on your 12.10. Install the package and it should install the correct driver for your hardware. Hopefully it will fix your problem.
It is also worth to remind you that when installing drivers from other locations than official Ubuntu repositories it can introduce new problems to your system. But let's hope that this time everything will work out just fine.