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Under Ubuntu hardy, I had some problems with the stock release of mplayer, so I patched it with the ubuntu patches and the compiz patches and it all works really nicely - I can even have transparent windows. If you have Hardy, try this deb (it bumps the epoch number so it doesn't get overwritten by the ubuntu mplayer version).
How come neither Intel or nVidia drivers needed DRI2 to provide flicker-free video playback, plus flicker-free 3D rendering? What is preventing AMD's fglrx drivers to have the same functionality?
nvidia doesn't use Xorg's direct rendering infrastructure. Under compiz the intel driver does suffer from the same flickering video (unless you use textured video, which is still problematic) and flickering 3D applications (unless you use DRI2).
you'll need a compiz-patched mplayer to render the video - that is, it patches the code to run the 'xv' video driver to point to compiz instead. when that'll all fine & done, run mplayer using 'xv' as the video, and compiz will do the rendering.
result: redirected video, thats higher on the CPU than actual xv but much lower so than x11, and smoother + prettier might I add. that what i use.
the real fix for this will come when all direct rendered data - that is, xv video & all fashions of opengl apps that draw straight to the framebuffer - gets to be redirected using DRI2, which is still somewhat experimental and for which fglrx support is expected to be somewhere in the long, long term future. unfortunatly.