There are several things that may be causing this. You may not have a codec for Xine needed to load the file. You may not have your video card configured properly. The file may be corrupted. Your sound card may not be configured correctly. And there's probably more since I'm no expert.
I have had lots of trouble with Xine. I prefer Mplayer, it plays pretty much anything.
When you say your system freezes; have you tried CTRL+ALT+BACKSPACE? This restarts the X server and usually fixes anything. If you can get to a command line you can enter "killall xine" and kill the process.
I have been using Linux for a couple of years and have never had the system lock up. Usually its a process that's locked, not the whole system.
So, try a newer version of Xine, or Mplayer. Check your sound and video drivers and configurations, and make sure the file isn't corrupt and see where you end up. Post back if nothing seems to work.