I dunno about leafpad, but your device comes with the editor "vi".

1) Open an X terminal
2) Type the following: vi ~/.mplayer/config
3) This will open the editor on that file.
4) Press "I" on the keyboard to enter insert mode.
5) Type what joppu has above (you can ignore lines that begin with a # symbol)
6) When finished, hit "Esc".
7) Hit "Shift" key + ":" key.
7) Type "wq" and press enter.
8) Finished!

In all cases, you don't type the quotations.

If you struggle to use the editor vi, you can find a great guide here with a nice cheatsheet.