What player are you using?? I use smplayer and you need to set the video output device to VDPAU.
To make sure its working you can use the VDPAU testing tool.
http://www.nvnews.net/vbulletin/showthread.php?t=133465
I get <5% CPU on 1080p h264 and VC1 using a £30 8400gs
Best to disable the composite extension for tear-free playback but you can get it working with this enabled by tweaking the compiz refresh rate settings.
g++ -c -pipe -g -Wall -W -O2 -D_REENTRANT -DQT_NO_DEBUG -DQT_THREAD_SUPPORT -DQT_SHARED -DQT_TABLET_SUPPORT -I/usr/share/qt3/mkspecs/default -I. -I. -I/usr/include/qt3 -o h264decoder.o h264decoder.cpp
h264decoder.cpp:2: fatal error: QFile: No such file or directory
compilation terminated.
make: *** [h264decoder.o] Error 1