For the "tl;dr" crowd, I'll just give a summary of the problem, rather than force them to read the whole thread.

No, the N9 does not play HD resolution video very well, if at all. Those phones which do play HD resolution video are using specialized hardware specifically designed to deal with HD data.

However, please note that the N8 has a screen resolution of 640 x 360 pixels. You may be able to play HD resolution videos on the thing, but you sure as heck ain't going to be seeing the higher resolution.

Almost no phone exists that has a native HD resolution screen. (I have been informed that the HTC Rezound has a full 720p screen, so there are some phones that do...) Most phones that can display HD video are simply "throwing away" the extra bits of resolution in order to fit the video onto the screen.

You can, of course, reduce the resolution of a video yourself, using a wide variety of tools. (And these tools will almost always produce a higher quality result than a phone trying to do the same thing in real time.) Many of the posts above in this thread describe how to do this.