( http://www.videolan.org/support/faq.html )

Turn on DMA on your DVD device, for instance:

    Under Linux:

    # hdparm -d1 /dev/dvd


If you are running Linux, you can additionnaly upgrade to the latest X.Org version. 
If supported, check that the xvideo plug-in is effectively used with:

    % vlc -vv

Stop other running applications...
Try disabling framedropping. Framedropping allows VLC not to decode some pictures 
when the CPU is overloaded, but can result in choppier playback under certain conditions.

Framedropping behaviour can be configured in the Video preferences of VLC.