Wrong, VLC does support hardware acceleration as of VLC 1.1...
I am confused though, the first guy says no problems with 1080p mkv on 1.4/4gb even connected to external display
Dammit Cubs do you have the 1.4? Make sure this is set right:
http://www.chipmunkninja.com/1080p-MKV-playback-on-Mac-1r@
Also, I would suggest using Perian codecs and make sure you have the latest 1.1.3 VLC. If not try MPlayer OS X Extended, I've had great luck with that on 1080p mkvs.
I was just about to make my purchase of the 1.4/4gb but now I'm worried it won't be able to handle 1080p mkvs...