I had the same issue using the open 'ati' driver on my R300 powered
9700Pro when running Totem on gutsy.

How ever if i run VLC and select X11 video output in the advanced
options of the Output Modules item, i get smooth video that doesn't
appear to have any issues, and i don't think its cpu rendered as it'd be
slow and jerky on my Ath XP2600+.

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Video playback gets buggy when Compiz is on
https://bugs.launchpad.net/bugs/122979
You received this bug notification because you are a member of Ubuntu
Desktop Bugs, which is a bug contact for compiz in ubuntu.

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