VLC has come to the iPad, allowing many more media formats that before were unplayable on Apple devices. Without hardware acceleration, however, you're going to run into playback issues. Here are your best bets for optimal playback.
Out of the starting gates, VLC Media Player for iPad is a little buggy and doesn't play back HD content too well, but it's still very, very welcome. The interface is pretty slick and copying your media files through iTunes is simple enough. While some formats aren't supported (RealMedia, FLV, etc), many new ones are (AVI, MPG, MKV, etc). Let's take a look at getting your media files into VLC and which files it'll handle best.
Adding files is pretty straightforward. Hook your iPad up to iTunes, choose it from the sidebar, click the "Apps" tab and scroll down to the "File Sharing" section. From there you can choose VLC and add files through drag and drop or the "Add..." button. As soon as you do, iTunes will start copying the files over to VLC, and you'll be able to use them immediately after it finishes.
The problems come when you start copying supported files and VLC crashes or simply can't handle the work you're throwing at it. This is a shortcoming of the iPad more than VLC, as the iPad is really only designed to play back MPEG4/H.264 encoded to Apple's specifications. VLC doesn't seem to take advantage of the iPad's MPEG/H.264 hardware acceleration and so HD files tend to be a unwatchable and may cause crashes. VLC is, at least, kind enough to warn you when you're trying to throw a file at it that your iPad can't handle.
Determining what you can play back well is a little difficult, since it's mostly trial and error. VLC will let you know when it thinks you're pushing the limits, but often, files that it thinks it can play don't look so great. So what do you do? We've played around with VLC for iPad a bit and have found that most standard definition files work alright. For the most part, your best bet is standard definition AVI files using DiVX. Even at higher bit rates (about 2500kbps), DiVX AVIs seemed to play back smoothly and scrubbing wasn't an issue. This is great news for BitTorrenters, as most TV shows are already encoded as DiVX AVI and are already optimal for iPad playback in VLC.
If you want HD on your iPad, VLC will get you half-way there. While 720p DiVX AVI video stuttered quite a bit, the same video encoded at about 3000kbps at 960x540 worked just fine. Since 960x540 is the recommended resolution for your iPad's video anyway, it's a good target for your HD content.
VLC is available now on iTunes, absolutely free.
Have you played with VLC for iPad? Share your experiences in the comments.
VLC Media Player [iTunes App Store]