video acceleration in gallium is working on r600g but currently limited to mpeg1 and mpeg2 I think.
There is work being done for webm support and I am sure somewhere somewhere is trying to implement it for h.264, but that is not ready yet.
I am curious: What performance exactly do you need? Only video playing?
Recently I was surprised that portal 2 in wine was running very well on my HD 6550 mobile card on mesa git. Needs only minor performance tuning now to be perfect so it is indeed quickly progressing...