The video player supports fast hardware decoding and almost all available formats (AVI, MP4, WMP) including the lossless ones. The interface may seem a bit dull that's why VLC team provides you with a set of different skins.
VLC media player has always been one of the things that gives you foothold in life: version by version were released and only the most sophisticated users could distinguish between them. All changes were discernible only after a very nice magnifying glass. VLC 2.0 is quite the contrary: echoing the developer, you can say that this release is 'a major upgrade for VLC'.
The major new feature that the latest version of VLC Media Player has to boast is the re-written output core and modules. The internal program machinery was slightly honed down, now supporting subpicture blending in GPU. Put in layman's terms, it means that the subtitles or extra camera angles coming alongside a video can now be blended right into the picture within the player, presumably spicing it up with the hardware acceleration. If you're wondering what you could need it for, just imagine you're trying to post a video of a hilarious moment in your favorite French TV series to YouTube or whatever, and there are only English subtitles available with no voice-over in sight. For that end, you'll most likely be using the player's own recording capabilities, cutting the needed fragment right out of the video on your computer. In that case, the only way to get the subtitles displayed in the posted video is to 'blend the subpicture'. So, I'd say that's a nice one.
The .mkv format fans have also something to rejoice at: the new VLC media player version now correctly supports the lossless format audion for the .mkv videos. What it boils down to, is that now you can pack an HD video into a Matroska file and enjoy the high-quality sound along with the nice picture. At last!
Among other Windows version features that a non-professional user can comprehend without delving deep into Wikipedia or Google are the experimental Blu-Ray disk support ('experimental' presumably meaning that it tends to fail here and there) and a bunch of new video outputs and quality-improving video filters for Windows 7. All in all, VLC 2.0 for Windows has seen a number of great quality improves and support fixes, making the use of the player more comfortable.
However, it is not gold that glitters. Even though the new VLC features contribute to the overall player's usability, they are actually nothing to write home about. In fact, there is a whole lot of other media players that have been featuring something like this for ages. The only excuse for VideoLAN presenting these changes as the highlights of the new versions is that the VLC media Player is actually an open-source project, focusing largely on portability. And for a program of its kind, it plays its part perfectly: it can be by far not so sophisticated as its commercial counterparts, but it is still one of the best media players you can get for free.