I'm running Ubuntu 8.04 64-bit. My problem is that when I use VLC to play DVDs, no matter what I do I can't seem to get them to look nice.

If I choose the "X11 output module" in VLC, blacks appear black but the pixels are unsmoothed. If I choose "XVideo output module", the images are smoothed but the blacks are grayish and the image is hence washed out.

I've got this problem regardless of whether Compiz is running or not. Any suggestions? I normally use SMPlayer for most video but it doesn't handle DVDs with menus particularly well, hence VLC.