Post Processing in VLC Player. What does it do ?

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Post processing effects make the video look smoother, this is only really applied to low-quality or low resolution videos. It does it by smoothing the edges of pixels. By default deinterlacing is on, you would normally just use that.
It hardly makes a difference, but depends on the video size and quality.

On some particular streams (MPEG 4, DIVX, XVID, Sorenson, ...), some additional image filtering can be applied to the video before display, improving its quality in some cases. This can be enabled in the Video menu, Post processing menu item. Different levels of post processing can be chosen here. A higher level means more filtering, but at the cost of system resources.
 

xander.tom

Right off the assembly line
Simply put. When you are watching low quality video file (read not HD file) the pixellation is smoothened out to create better and watchable videos with less pixellation. If you squint, you can see a blurring feel added to the video. It can be seen more proficient on peoples skin in the videos.
 
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