This is the wrong place to post errors like this. Please make a new topic for problems with files being played on the player actually. Since you said that the files are fine when playing them on the computer, it is a problem with the mpegplayer plugin and not this program.
[edit]Version 1.0 is ready code-wise. It includes a VLC option as well as a settings dialog that lets you choose will detect if you have VLC installed, and if you do have it installed let you choose between VLC and mencoder (otherwise, you're stuck with mencoder). The settings dialog includes options such as output video bitrate, audio bitrate, fps, audio codec, video codec, and (VLC only) width and height specification. All settings are stored in an ini file. Now that you're all ready for 1.0... I can't give it to you yet. I'm having a problem with the VLC command line (VLC will open and just crash, if anyone thinks they can help.. I've posted details at
http://forum.videolan.org/viewtopic.php?t=32169). Once this problem is solved, version 1.0 will be released.