VLC Beta 1.0.7 update is live now and it has proved to be an useful update, so far.
On my Lumia 1020, the video freeze bug is gone and I can play videos finally. Background audio is back too (last update broke it). Also, noteworthy is the imported performance of the app. So, good work there, VLC team and keep it up!!
The app can’t still play HD videos and team has confirmed that it is work in progress and expected to come in future releases.
REMINDER: While this update provides fix for freezing when playing videos, it does NOT fix the lags on HD videos. Another fix will come.
— Thomas Nigro (@ThomasNigro) January 14, 2015