I have a virtual size of 2304 1024 to accommodate a 1280x1024 monitor next to 
the internal 1024x600 screen.
After removing the virtual line, video playing works again.

-- 
[i945gm] all video players crash with BadAlloc error (no Compiz)
https://bugs.launchpad.net/bugs/359831
You received this bug notification because you are a member of Ubuntu-X,
which is the registrant for xf86-video-intel.

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