Thanks for the help.  I think I've pinpointed the source of the problem.
I had set the CacheLines parameter in my xorg.conf as part of a tutorial
for a dual monitor setup.  Also had the PageFlip parameter set.  Both of
these seem to be big no-nos for video playback with the intel card.

Removed them and can now play video.  Using AccelMethod EXA also works
if CacheLines if these parms are not set.

In short, I just removed all the nonstandard configuration options in
the card's device section and that took care of things.  Hopefully dual
monitor will still work ok.  Will find out tomorrow.

-- 
totem crashes with 'BadAlloc (insufficient resources for operation)' when using 
compiz and xserver-xorg-video-intel driver
https://bugs.launchpad.net/bugs/111257
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