Your video card has enough video memory bandwidth to handle 1920 by 1080 for video playback. You just have a problem with software efficiency. I recommend use Xfce and do not use Compiz or any compositing features.
Your notebook computer will not be able to handle the decoding for any higher than 480p. You may get 720p, but not well. The video codec Xvid is a form of MPEG-4, but it could also use H.264 which will need more processing power.
I recommend run mplayer from the command line. I suggest include direct rendering option for mplayer to it make faster to render the video. If you have not used OpenGL for video playback, try the following.
mplayer -dr -vo gl -vf scale=-1:-1
file
If you see tearing or the video playback is not playing well, I suggest include "-nosound" because the sound track could be causing the problem. If the video plays smooth, update the audio codec that the sound track uses.
I suggest go to the following page.
http://wiki.multimedia.cx/index.php?...eral_Questions
I think you are running too much services and your kernel is not set to any preemptive state. Also your kernel probably does not have polling interrupt set to 1000 Hz. Make sure cpufreq governor is set to performance.
Kernel mode setting is not a performance feature. It is an eye candy feature which will penalize performance. This feature tells the kernel use one resolution and let the video card handle the scaling when switching to different resolutions.
One thing to note. If you disable VSYNC for video playback, you are at the mercy of your own stupidity. By disabling VSYNC, video playback will have unlimited frames per second and your monitor has a limit for frames per second. Your problem may not be Linux, but your monitor not keeping up with the amount of frames that your video card is rendering.