I used to love watching movies in the train on my ipod touch and was very disappointed with the player included in android 1.5.
Act 1 Video player is the answer :) I tried the trial during two days and just bought now, definitely worth 0,99$.

I hope the development will follow the androïd one, just heard that "eclair" (android 2.0) will be available on the HTC Hero. For now, 5 stars for me !