on ubuntu 11.10, nvidia 280, and a quadro 600 ( VDPAU Feature Sets C ),
there is a slight stutter of the video (hd video)
same problem with xubuntu, lubuntu, fedora, mint.
But, no artefacts at all with archbang.
media player : vlc
I believe you need to install libva or vdpau-video, because vlc does not use vdpau directly, but needs some sort of backend installed for vaapi. (which I believe has a backend which defaults to either the x or gl shader acceleration method). Also Hardware acceleration in vlc on some distros is not flipped on by default.
Basically using the vdpau-video wrapper is not that good, it does not even work with xbmc correctly which supports vdpau + vaapi. vlc could only use vaapi when the ffmpeg/libav used was single threaded, otherwise it was disabled anyway because it immediately crashed. For native vdpau i would always use xmbc or mplayer2. mplayer2 can use the vdpau rendering too, needs vc override to use it for decode.