Sort answer - It works great
Long answer
Besides following all the above directions one should also set <usevdpaumixer> to TRUE otherwise video will look plain ugly without it with all the rough edges.
There are also two others that I have disabled. I am not to sure as of what they do or should I enable them too
<vdpauUpscalingLevel>false</vdpauUpscalingLevel>
<vdpau_allow_xrandr>false</vdpau_allow_xrandr>
On high bitrate content [details below] I saw on one of my videos that it works perfectly and then all the sudden playback will pause with video being buffered, reports of of V/A out of sync errors until it gets buffered back again then errors will quickly disappear. I do not know reason for the buffering as this is local video on SSD drive and CPU use does not ever go over 25% on any of the two cores. Later on I will check if it has any thing to do with this modeline I introduced from here for 24p videos
http://paste.ubuntu.com/6142741/
XMBC Log:
http://pastebin.com/FAJanKfL
System:
AMD E350
kernel 3.11.1 + new audio patches + one audio patch reverted (according to instructions)
ffmpeg 1.2.git
http://git.videolan.org/?p=ffmpeg.git;a=...elease/1.2 + openelec patches
https://github.com/vicbitter/OpenELEC.tv...atches/1.2
mesa master git + deathsimple radeon patches including interop
xbmc FernetMenta master git
Video details:
General
Complete name The Matrix (1999).mkv
Format : Matroska
Format version : Version 1
File size : 7.95 GiB
Duration : 2h 16mn
Overall bit rate : 8 347 Kbps
Encoded date : UTC 2007-06-26 16:44:24
Writing application : mkvmerge v2.0.2 ('You're My Flame') built on Feb 21 2007 23:40:55
Writing library : libebml v0.7.7 + libmatroska v0.8.1
Video
ID : 1
Format : AVC
Format/Info : Advanced Video Codec
Format profile :
[email protected]
Format settings, CABAC : Yes
Format settings, ReFrames : 8 frames
Codec ID : V_MPEG4/ISO/AVC
Duration : 2h 16mn
Bit rate : 7 704 Kbps
Width : 1 920 pixels
Height : 800 pixels
Display aspect ratio : 2.40:1
Frame rate mode : Constant
Frame rate : 23.976 fps
Color space : YUV
Chroma subsampling : 4:2:0
Bit depth : 8 bits
Scan type : Progressive
Bits/(Pixel*Frame) : 0.209
Stream size : 7.18 GiB (90%)
Writing library : x264 core 54 svn-635M
Encoding settings : cabac=1 / ref=5 / deblock=1:-4:-4 / analyse=0x3:0x133 / me=umh / subme=6 / brdo=1 / mixed_ref=1 / me_range=16 / chroma_me=1 / trellis=1 / 8x8dct=1 / cqm=2 / deadzone=4,6 / chroma_qp_offset=0 / threads=2 / nr=0 / decimate=1 / mbaff=0 / bframes=3 / b_pyramid=1 / b_adapt=1 / b_bias=0 / direct=3 / wpredb=1 / bime=1 / keyint=250 / keyint_min=25 / scenecut=40(pre) / rc=2pass / bitrate=7704 / ratetol=1.0 / rceq='blurCplx^(1-qComp)' / qcomp=0.60 / qpmin=10 / qpmax=51 / qpstep=4 / cplxblur=20.0 / qblur=0.5 / ip_ratio=1.40 / pb_ratio=1.30 / zones / aq=1:0.3:15.0
Language : English
Default : Yes
Forced : No
Audio
ID : 2
Format : AC-3
Format/Info : Audio Coding 3
Mode extension : CM (complete main)
Format settings, Endianness : Big
Codec ID : A_AC3
Duration : 2h 16mn
Bit rate mode : Constant
Bit rate : 640 Kbps
Channel(s) : 6 channels
Channel positions : Front: L C R, Side: L R, LFE
Sampling rate : 48.0 KHz
Bit depth : 16 bits
Compression mode : Lossy
Stream size : 624 MiB (8%)
Language : English
Default : Yes
Forced : No