I have the same problem here. Machine is HP Compaq NW8240 notebook with ATI 
Mobility FireGL V5000 on radeon driver.
I am able to run even some 720p movies with VLC, but I can't watch Flash videos 
(Youtube and others) full screen.
Everything seems ok when they are normal size, but when enlarged i ged at most 
1 frame per second.
Firefox also becomes slugish and using too much cpu when opening a flash 
intensive web site.

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Youtube videos barely run. Have sound, beyond choppy video.
https://bugs.launchpad.net/bugs/551418
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