@vatastala

You might take a look at this thread. There is lots of great info there.

What version of MPlayer are you using?
I am using 1.0rc1-maemo.29.n8x0 (may be from Extras-Devel)

My test vid is The Matrix. Especially the security / corridor scene towards the end of the movie. Lots of action/movement/explosions etc.

Encoded

Container: AVI
Codec: XVID
VideoBitrate: 634 kbps
Resolution: 576x352 (scales up to full screen when played)
audio codec: mad
Audio bitrate: 128 kbps
audio samples: 44100 Hz, 2ch

I seem to recall MPlayer updating recently...not sure though. However, before the ?update? the video would play nicely for 30 seconds or so then stutter. I just tried it again and no stutter.

Instead of Mp4 you might try AVI