Yes, you're using the intel driver and xv is working fine. The driver
reports that it is out of ressources and xine can nothing do but quit.
I believe that this is a limitation in either your hardware or in the
driver. Does xine work if you lower the display resolution?
in any case, I open a bugtask for the intel driver.
** Also affects: xserver-xorg-video-intel (Ubuntu)
Importance: Undecided
Status: New
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xine crashes on open with X Error - BadAlloc
https://bugs.launchpad.net/bugs/388413
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