Yes, there's a well known design flaw by which the N8xx can't get video from the main memory to the display as quickly as the 770 can.

See the N800 & Video playback thread on maemo-developers for more details.

As for using assembler-translation, I'm not sure that's necessary: I haven't tried, but I'm sure libavcodec will compile and run on Maemo, it just won't decode anywhere near realtime; except for where ssvb's already gone to the effort of optimising DivX/Xvid.

I'm sure he'd appreciate a hand, though ;-)