I've heard good things about VLC, but to be truly usable on a "low-rpm" ARM engine it would probably need a lot of optimizations (both perf + power mgmt) which may not be within the scope of a SoC project.

Wrt streaming media to Nx0, have people tried forwarding video from p2p clients like TVants or Sopcast to the tablet? The original resolution is sometimes too large for the tablet's screen and also bandwidth-wise, but if the feed could be buffered and transcoded on the fly when needed..

IIRC Sopcast does have a native (?) Linux client, but on a home network the PC could handle the upstreaming and a pass the feed via WIFI to the tablet's media player.