The VDPAU API was just introduced late last year with the introduction of an updated NVIDIA driver, but since then support for this video API has appeared in MPlayer / FFmpeg, MythTV, Xine, and VLC. There is also a VDPAU back-end for VA-API. Right now only the proprietary NVIDIA driver provides VDPAU support, but Intel is considering VDPAU support for its X.Org driver.
Now though the latest achievement for VDPAU is support in XBMC for this interface. XBMC (formerly known as the X-Box Media Center) is used by Boxee and continues to grow in popularity. Right now the XBMC VDPAU support exists in a separate SVN branch, but we imagine it will soon be merged into the mainline code-base. More information on this support can be found in the XBMC Forum.
The VDPAU implementation in the XBMC Media Player supports H.264 decoding, MPEG-1/2 decoding, VC-1 decoding, hardware de-interlacing, and VDPAU post-processing.