After the upgrade from Karmic Koala to Lucid Lynx (and re-enabling lucid package sources, reinstalling the appropriate xbmc packages), the video playback was producing some strange results; while audio and subtitles were displayed nicely, the screen was just flashing in different colours where it should have shown video…
The xbmc.log was not in any way suspicious to me (no errors, warnings, complaints about display or rendering).
The best solution for the time being was to go to System / Video / Playback in XBMC and change Render method from Auto detect to either Software or to Basic shaders (ARB). Basic shaders look slightly better to me, also that should utilize the GPU instead the CPU so that’s what I set for my box.
VDPAU and Advanced shaders (GLSL) are both producing the forementioned colourful psychedelic effect.
The box is an EeeBox B206 with a Radeon HDMI card:
lspci | grep -i vga, using the fglrx driver.
03:00.0 VGA compatible controller: ATI Technologies Inc Mobility Radeon HD 3400 Series