hi, i also had the same problem, vlc on hardy closes if I try to use openGl. I 
have Ati as well and with other configurations video quality is poor. I managed 
to solve (partially) the problem installing latest proprietary drivers from 
http://ati.amd.com/support/driver.html
Quality is now good as in windows, but videos can be viewed only in full screen 
mode. if in window mode, image is bad/black...

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VLC closes immediately when using "OpenGL Video Output" option
https://bugs.launchpad.net/bugs/223762
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