Playing the bin file like mplayer filename.bin works for me.
I have never needed to specify any of that cue:// stuff.
To get some better hardware acceleration, I use:
mplayer -vo gl2,xv -cache 32768 -vop scale=640:480
Your output actually says you're missing the correct codec.
I suggest you compile your own mplayer from source and include support for all codecs available at mplayer HQ.
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