from my experience, VLC was great handling different codecs, and everything thrown at it, but it doesn't handle HD videos too well. I've been primarily using WMP 64bit and Media Player Classic and Media Center(win7RC).
use this if you have 64bit system. it's a 2 step procedure. works well.
http://shark007.net/win7codecs.htmlI still can't get WMP/MediaCenter to handle FLAC audio files properly.
Without any third party codecs, they both play FLAC but don't support tags. I installed WMPTagSupport and now it shows the tags, but doesn't play the files...hah. This previously worked in WMP11.