Possibly VLC is configured to use a Xv overlay for output. Many video cards/drivers only support one such overlay, and in your specific case it's on the laptop display. It happens just the same on my 'el-cheapo' no-name SiS 671 laptop. The SiS 671 chipset only supports one video overlay, and if I move any Xv window to the second monitor the video display will be blank (although GUI items will show).
- Use an utility (specific to your video card make/model/driver, in my case it'd be SiSCtrl if I were to get it to compile on Ubuntu Jaunty) to set the video overlay to the secondary display (or, it may involve editing xorg.conf manually).
- Use another display output method. I haven't used VLC for a while but I'm sure it supports other methods (OpenGL, software, etc). It's trial-and-error here - see what works for you.
Hope this helps.