I’ve just posted an update for my generic iPhone 3G vs. 3G S article
. You may want to read it if you need info on how non-native videos can be played back. I review and compare all the three Cydia-based (jailbreaking necessary!) solutions for this: yxFlash, mPlayer and VLC. As you’ll see, you’ll want to go for the former two and, at least for video playback, completely forget VLC.