I haven't had this issue with vlc 1.0.6 in Lucid. Marking as fixed.
There is also a workaround from http://forum.videolan.org/viewtopic.php?f=13&t=53415#p191217 I used to have this problem and solved it by disabling desktop effects. If it doesn't solve, try "sudo renice +1 <vlc pid>"
I haven't had this issue with vlc 1.0.6 in Lucid. Marking as fixed.
There is also a workaround from http:// forum.videolan. org/viewtopic. php?f=13& t=53415# p191217
I used to have this problem and solved it by disabling desktop effects.
If it doesn't solve, try "sudo renice +1 <vlc pid>"