I just wanted to post my own experience with experimenting with this, since I really want to see fullscreen playback of videos in X.
xrandr -s 1 | mplayer movie.avi works, but the video only takes up the width of the screen. xrandr -s 1 | mplayer -fs movie.avi sort of works, but the matchbox panel is still visible. Oh yeah, and after exiting the movie you're still stuck at 320x240, so I had to do xrandr -s 640x480 to get my screen back.
If someone knows how to hide the matchbox panel while playing movies in fullscreen with mplayer, that would do the trick, and I could make a short script that anyone could use to play fullscreen videos in X.