just thought to give my 2 cents here as first post
About your concerns with video playback i would suggest to give xmbc a try (which has hw accelerated playback through omx).
There a several different ways to get it running, naming just a few images/methods I used so far
http://www.raspberrypi.org/phpBB3/viewt ... 58#p128758
[guys, really thank you for all your hard work on the different xbmc builds and ofcourse the whole Pi foundation, Raspbian team and original xbmc creators]
Last one by silas is the one I am using right now, Raspbian image with xbmc and some other stuff pre-installed.
And it is doing VERY well with an decent sdcard and some overclocking*. I agree that x feels not very usuable right now, but video playback works nearly perfect for me, ready for daily use
*overclocking i use currently that seems stable:
over_voltage=4 (this harms warranty, be warned)
over_voltage_sdram=2 (this also)
be sure to read the thread about overclocking, or some of the blogs which compare the speed with increased frequencies and figure out what your Pi can do stable with or without increased voltages, every Pi is different
Have fun and good luck