Not ment to be confusing, sorry bout that. The (-vo) is the (video output) device used by mplayer to display your movie file whatever that may be.
Try this with yourmovie.wmv and see what happends:
mplayer -vo gl yourmovie.wmv
If you type:
mplayer -vo help
You will get something like this:
Available video output drivers:
xv X11/Xv
x11 X11 ( XImage/Shm )
xover General X11 driver for overlay capable video output drivers
gl X11 (OpenGL)
gl2 X11 (OpenGL) - multiple textures version
dga DGA ( Direct Graphic Access V2.0 )
sdl SDL YUV/RGB/BGR renderer (SDL v1.1.7+ only!)
ggi General Graphics Interface (GGI) output
fbdev Framebuffer Device
fbdev2 Framebuffer Device
aa AAlib
caca libcaca
dxr3 DXR3/H+ video out
zr Zoran ZR360[56]7/ZR36060 Driver (DC10(+)/buz/lml33/MatroxRR)
zr2 Zoran ZR360[56]7/ZR36060 Driver (DC10(+)/buz/lml33/MatroxRR)
png PNG file
jpeg JPEG file
gif89a animated GIF output
null Null video output
pgm PGM file
md5 MD5 sum
mpegpes Mpeg-PES file
yuv4mpeg yuv4mpeg output for mjpegtools (to "stream.yuv")
vesa VESA VBE 2.0 video output
xvidix X11 (VIDIX)
cvidix console VIDIX
tga Targa output
As you can see there are many to chose to display different kinds of files for different types of hardware. Some work better with certain files then others. "gl" sometimes helps if you may have trouble with .wmv files etc...
Here is some good information to expand on:
http://www.mplayerhq.hu/DOCS/man/en/mplayer.1.html
KC