For the Kiwilinux derivative of Ubuntu one of the main goals has always been including reasonably complete support for multimedia content on the CD so the user does not need to search and install the bits needed for restricted formats.

By default Ubuntu uses Totem with the Gstreamer backend for both file based and streaming media.
The easy codec installation feature has made support for most restricted formats fairly straightforward although still incomplete in my experience.

So far our choice in Kiwi has been mozilla-mplayer for streaming and totem-xine as the standalone player. Libxine's maturity, better support of DVD subtitles and menus and more compact packaging - one package vs. 5-6 Gstreamer ones - made it a better pick.

For the 8.04 release I have briefly revisited the issue and I still cannot find a way of supporting the most common formats with only a single multimedia stack. The problems I have found so far include:

* VLC - although reportedly supports all conceivable formats the browser plugin is broken in Ubuntu 8.04
Bugs in Launchpad and upstream

* Totem-gstreamer - DVD menu support lacking (not a big issue but still) and apparently no consistent way of getting ASF streams to work (BBC News short videos for instance).

* Totem-xine - conflicts with PulseAudio, reported on the forums and LP and in my experience too; after a short while of playing audio goes mute and the app claims that the audio device is being used by another app.

* MPlayer - it seems to be closest to the goal but it does not have a decent and simple GUI like Totem (gnome-mplayer is promising but buggy)

I'd be happy to be proven wrong and given either the simple workaround for Xine and PulseAudio, a list of gst plugins that correctly play streaming media in the browser or an easy fix for VLC.
Until then like most other people I know I'll have all of these libs and players installed and use the most appropriate for each scenario :)

And Kiwi 8.04 is likely to include both Totem and MPlayer for the same reason just like the previous releases have.