Managed to compile the latest Intel video stack.

I'm really quite happy with it.

Xorg log: http://pastebin.com/LUyN2Hua

X.Org X Server 1.18.0
[    31.938] (II) Loading /usr/lib/xorg/modules/drivers/intel_drv.so
[    32.140] (II) Module intel: vendor="X.Org Foundation"
[    32.140] 	compiled for 1.18.0, module version = 2.99.917
[    33.279] (II) intel(0): [DRI2]   DRI driver: i965
[    33.279] (II) intel(0): [DRI2]   VDPAU driver: va_gl
[    33.279] (II) intel(0): direct rendering: DRI2 enabled

glxinfo: http://pastebin.com/Awmhp5YA

OpenGL version string: 2.1 Mesa 11.2.0-devel (git-af7ba98)

vainfo

slackjack@slacker:~$ vainfo
libva info: VA-API version 0.38.0
libva info: va_getDriverName() returns 0
libva info: Trying to open /usr/lib/dri/i965_drv_video.so
libva info: Found init function __vaDriverInit_0_38
libva info: va_openDriver() returns 0
vainfo: VA-API version: 0.38 (libva 1.6.1)
vainfo: Driver version: Intel i965 driver for Intel(R) GM45 Express Chipset - 1.5.1
vainfo: Supported profile and entrypoints
      VAProfileMPEG2Simple            :	VAEntrypointVLD
      VAProfileMPEG2Main              :	VAEntrypointVLD
      VAProfileH264ConstrainedBaseline:	VAEntrypointVLD
      VAProfileH264Main               :	VAEntrypointVLD
      VAProfileH264High               :	VAEntrypointVLD

vdpauinfo: http://pastebin.com/UnebmY2c

I have hardware accelerated video now through smplayer using the ffh264vdpau codec, and through firefox with webm and flash.

vdpau seems to be working great for Intel's latest stack.
(Just had to have some bragging rights, because it took a little time to make it all come together.)
Also perhaps to motivate anyone using Intel video, it's well worth getting vdpau-va-gl working...