I tried to enable VDPAU, which is a NVDIA API providing hardware video decoding. The key is to use up to date drivers and VDPAU enabled software. MPlayer provides VDPAU compatibility in the latest versions. However, the Ubuntu repository only has an outdated version of mplayer.
I used a 3rd party repository, avenard.com which provided an up to date version of mplayer, together with nvidia driver builds.
However, I couldn't VDPAU to work on my system. I'd either have VDPAU not starting, or corrupted display, or system crashes.
I had to revert to a more stable nvidia build, but since then OpenGL doesn't work anymore, and Compiz isn't happy either.
I think I did something wrong in the process; I will try again in a few days/weeks/months.