The output of that command shows:

xserver-xorg-video-ati | 1:6.6.3-2ubuntu6 | http://au.archive.ubuntu.com 
gutsy/main Packages
xserver-xorg-video-ati | 1:6.6.193-1ubuntu1 | http://au.archive.ubuntu.com 
gutsy/main Sources

Synaptic says that the first one, 1:6.6.3-2ubuntu6 is installed and that
this is the most recent.

VLC does seem to work properly now after this morning's upgrades.

-- 
[gutsy] vlc doesn't render properly with compiz 'normal desktop effects'
https://bugs.launchpad.net/bugs/132360
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