I copied my non converted movie files to the device.
I used the -vo xv parameter.
Movie 1): 624x352 XVID - approx. 1000kbs - 25fps
It is very choppy and laging, but there is absolutely no tearing.
In normal scenes I would guess about 8fps, it goes down to about every 2 seconds one frame in heavy action scenes, but again no tearing, even no out of sync. I tried to see some "backwards moving" frames, it just lags. But not constant, even in scenes where there is about the same movement in a long enough time period, it stops for about 0.5 -1 second, then plays some frames with much higher rates, then stops again 0.5-1 second and again frames with higher rates for approx. 1 second. But there are no loops or backward moving, as far as I could see it. In lower actions scenes, the laging is rather constant.

Movie 2): XVID 576x320 - 1100 kbps - 25fps
Hard to say, cause I got one frame every 5 seconds. The movies starts with approx. 8 fps for about 3 seconds and then goes down to one frame every 5 seconds.

I have Movie 1) in a recoded format: 400x240 - 512kbps - 25fps - 96kbit audio.
It works great, nearly 100% smooth and flawless. The same movie had a little trouble one day ago on the older firmware. In a little more complicated scenes it just laged nearly periodically. There are scenes where the "Odyssey" from SGC (Stargate ) flys from one corner to the other. On the older firmware it was literaly a jumping. Now it's very smooth.

Funny thing: Movies that are out of sync on mplayer are synced in media player. Movies that are out of sync in media player are synced in mplayer. The other ones are synced both in mplayer and media player