That seems to be a bug.
Originally Posted by dabbi2000
In order to make sure you are running the Nvidia driver:
Backup your X config file first:
Then run the Nvidia X Server Setings:
# sudo cp /etc/X11/xorg.conf /etc/X11/xorg.conf.old
Select X Server Display Configuration (left). In the right press 'Save to X Configuration File'. Restart your machine/
$ gksudo nvidia-settings
As a precaution, disable all effects so can be take out of the equation while testing video hardware acceleration (VHA). There's 2 ways to get VHA. Using nvidia's vdpau or the generic vaapi. I don't have experience with vaapi, so here we go with vdapau.
First check if the library is installed:
If installed the output should look something like this:
$ apt-cache policy libvdpau1
VLC doesn't work directly with vdpau so you need to test with SMplayer. Install it from the Software Center. Before playing any video, go to Options -> Preferences -> General -> Video. There, set the Output driver to vdpau. Restart SMplayer and test your HD videos.
*** 0.3-2build1 0
500 http://mirror.anl.gov/pub/ubuntu/ lucid/main Packages
Tell us how it goes,