I used to watch 45 minutes long movies on my C700, sometimes suspending it while playing and I never had a lockup this way.
I'm using my own encoded files and own mplayer launching script and I'm not using the default Window manager stuff either (matchbox+openbox).
There are some topics about video playing under pdaXrom, but I paste my encoder and player script here, try it if you want.
Encoder script (Change the 320:240 scale if your videos aren't in 4:3 aspect ratio.)
#!/bin/bash
mencoder -oac mp3lame -ovc xvid -lameopts preset=32:mode=3 -xvidencopts pass=1 -af volnorm -vf scale=320:240 -ofps 15 -o "z.$@" "$@"
mencoder -oac mp3lame -ovc xvid -lameopts preset=32:mode=3 -xvidencopts pass=2:bitrate=200 -af volnorm -vf scale=320:240 -ofps 15 -o "z.$@" "$@"
Player script (Remove the FvwmCommand lines and the additional sleep if you are using matchbox+openbox, not Fvwm, like me. )
#!/bin/bash
xrandr -s 1
sleep 1
FvwmCommand Restart
sleep 8
mplayer -nortc -framedrop -fstype fullscreen -fs -ac mad -really-quiet $@
xrandr -s 0
FvwmCommand Restart
Zumi