I'm no expert, but I'm fairly certain that the entire decoding process is in fact hardware-assisted. The CPUs in these phones just can't manage the decode fast enough to supply the video data in real time, even for fairly low resolution video, unless perhaps the bitrate is miserably low. (The VLC guys completely gave up trying to port their software-based decoder onto the N900, and I think it was pretty much for that reason.)

I don't know much of anything about the N9's innards. But, unless the "Mali400" is already a part of the N9's video decoding subsystem, you're not going to be able to use it for videos. The silicon tasked with that job can't be changed.

But yeah, I was kinda glossing over the actual process these phones run by saying that it was the "equivalent of re-encoding" the video.