I recently installed Arch Linux and SMPlayer on a new computer capable of vdpau. I wasted a lot of time trying to figure out how to get vdpau working but I finally figure it out. The videos wouldn't play at all in smplayer using the vdpau -vc options but it would play just fine when using mplayer directly.

It turned out that this option: "-vf-add screenshot" that smplayer passes to mplayer was somehow conflicting with the "-vc ffh264vdpau,ffmpeg12vdpau," option. If I got rid of one or the other, the video would play but without the -vc options there's no vdpau.

Anyways, the way to get rid of the screenshot option is to blank out the "Folder for Storing Screenshots" in Options->Preferences->General->General Tab in smplayer. VDPAU works like a charm now.