Your xorg.conf contains the line:
Virtual 3200 1200
Therefore DRI cannot be used:
(EE) intel(0): Cannot support DRI with frame buffer width > 2048.
In Intrepid XV could still be used with overlay video. In jaunty XV
overlay needs DRI as well.
As a workaround you can use non-XV video, like you already mentioned, or
reduce the virtual desktop width to maximum 2048.
** Changed in: xserver-xorg-video-intel (Ubuntu)
Status: New => Confirmed
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all video players crash with BadAlloc error (no Compiz)
https://bugs.launchpad.net/bugs/359831
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