CoreAVC is decoder only.
I am all for using FFDShow where possible, but I have set up 3 different htpc configurations using Media Player Classic, VLC, and Windows Media Player using alternate codec packs. Xvid, Divx, WMV, and Vorbis all work wonderfully with VLC as well as FFDShow-based players. But my experience with VLC and h.264 hasn’t been as good.
On a P4 2.8 with a 6600GTX, VLC did work quite well with xvid and divx encoded materials. It did not fare well with h.264 material at 1920x1080; 1280x720 was as high as it could get with smooth playback. I found that ReClock did help quite a bit with Media Player Classic, but VLC just could not give me smooth playback. As soon as I began using CoreAVC (with or without ReClock) the viewing experience was spectacular.
I also set up software on an Acer Aspire One Netbook so that it could be quickly connected to an HDTV via standard VGA cable, and its Intel chipset choked badly on h.264 at any resolution. I did not expect any better, but I tried some 1280x720 material using CoreAVC and reclock, and it turned out to be very acceptable. I would not recommend this config though. It just proved to me beyond a shadow of a doubt that CoreAVC really does work better than anything else.
The system I personally am using has a DC Opteron 175 @2.5 and an nvidia 9300gs. The graphics card has hdmi out, but it is extremely weak in my opinion. I got the split-draw effect when playing any h.264 material at 1920x1080. VLC did work, but the split-draw stutter drove me nuts. Media Player Classic with FFDShow/Haali/Reclock was nearly perfect, but occasionally had to resync (video speeding up to catch up with audio). CoreAVC once again is perfect no matter what the encoder or resolution.
I hope I am not buying into any hype. I am sincerely convinced that I can see a difference. I use VLC for almost everything, including converting HDTV recordings to MPEG and DVD, recording internet radio, converting FLV to avi, etc., but hi-res h.264 decoding is one weakness of VLC I can notice.
I do prefer open-source where possible, but none of my hardware has open-source microcode, and I will gladly pay a little more for hardware that works perfectly - I have the same attitude about software.