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I really don't care much for VLC, never have. On a Windows platform I've always preferred MPC (Media Player Classic). VLC's only real advantage is that it's codec friendly but the way how it renders subtitles to the way it deinterlaces video is absolutely horrible.

For the Mac platform I prefer to use Mplayer Extended OSX. Not only does the picture quality look better but the post-processing feature (when used in High Quality mode) makes even the grainy videos look very acceptable to watch.

Mplayer Extended OSX doesn't seem to be fully compatible with Lion because when opening a file through the player, it shows a blank screen
 
No. Usual Web Rips are 3 - 8Mb/s have never really downloaded anything more. Blurays have the highest bandwidths at around 30Mb/s. That is still less than 4MByte/s which is absolutely no problem at all for HDDs that read 60-120 MB/s. If you have stuttering it is because it all runs software and the CPU isn't strong enough.

I've had hard drive slowdowns cause stuttering. It happens on my Core 2 Duo 2008 Macbook and teh 2011 Macbook Pro with an i5. If no other programs are running to write/read from the drive or swap things in or out, then it's fine but if the drive is fragmented (which OS X is just as prone to as Windows is) and even a few other programs that are memory hogs run (Firefox, Netnewswire) then I get occasional stuttering. Heck, I get stuttering out of SD videos and songs played in VLC sometimes even! Strangely it doesn't happen in iTunes for the songs (iTunes is an absolute pig playing video, but that's another story). iTunes seems to be much better at caching audio during playback than VLC.
 
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