Using different codecs and players will not solve your problems.
I had built my system around Intel atom D525MW for downloading, surfing and possibly for watching movies.
Forget 1080p, even 720p content playback was a problem.
And I hate those glitches and frame skips.
Finally, I decided to go for this Broadcom crystal HD decoder BCM70015 and spending that amount 3.5k was kind of gamble.
But from my own experience I can tell you it's worth every penny, it actually plays flawless 1080p and power consumption is around 1watt.
Anandtech review has mentioned it as "magic" (Anadtech has reviewed BCM70012 whereas BCM70015 is the newer version)
AnandTech - XBMC & Broadcom Bring 1080p Decode Upgrade to ill-equipped netbooks, nettops, Apple TVs