I use VLC for 720p and 1080i mpeg2 ts files, it's a fine player. The one area it falls down is mkv files, for which I use mPlayerOSX. VC-1 support has been included in ffmpeg, so VLC will support it in time. Check out their
website for updates,
I have upgraded the CPU in my Mini to a 2.16 Ghz Core 2 Duo with 2Gb RAM, and although it does improve higher bit rate files, I still can't play 1080p h264 at all. The GPU must be the bottleneck. I'm soooo hoping for a Santa Rosa based Mini to be announced with the new Intel integrated graphics (which has hardware h264 decoding included apparently).