IMHO, we should stick with dragon, it's a "simple" player usable for average users; also there's a good chance upstream will switch to phonon-vlc (or Mageia may switch to phonon-vlc when it stabilises more), so the best of both worlds :) (at such time it'll be easier to just add vlc main package as it won't add much space, and phonon*gstreamer* stuff won't have to be on the ISO, so the net weight should balance out...).
Also we should be thinking about the size of the Live ISO, putting vlc/mplayer/smplayer will bring more weight, and it'll be at the expense of some other useful packages that should exist on the ISO (we shouldn't forget users use the Live ISO as a test-run, demonstration of what a distro offers... etc). -- Ahmad Samir