Hi everyone!
Sorry for the late answer, but I was rebooting, trying stuff, dowloading, and rebooting again.
After checking documentation and trying stuff out I finally have an almost perfect solution.
This is the one liner I use for video playback (after login in as root):
Renicing it just to make sure all cpu priority goes to mplayer's process.
#nice -20 mplayer -vo xvidix -zoom -fs ./video.mp4
The reason why I have to run it with elevated permissions was due to the fact permission was denied to access the graphics card, this can be resolved by changing mplayer's SUID or executing it as root.
Another interesting bit is that -vo xv is not always the best nor the fastest solution for video playback, I tried the same line in a different computer with mixed results (didn't have support for xvidix or worse performance compared to xv video driver).
The following can be append to mplayer (according to the warning message you get whenever the computer can't properly play a video file):
-vfm ffmpeg -lavdopts threads=2:lowres=1:fast:skiploopfilter=all
Some notes about the previous line:
-It will take an impact on the quality of the video, so is better to apply it as a last option (specially skiploopfilter=all).
-the threads=CORES parameter is specifically meaningful for multi-core CPU's. (In my test computer, a single core one, does make any difference, but keep it in mind as per my experience content that was barely playable becomes super smooth).
At the beginning of the post I said an "almost perfect" solution since I'm not fully aware of all possibilities within mplayer and TC itself.
Thank you for all you support!
EDIT:
Forgot to mention, now I can play the majority of 720 (hd) videos from youtube!
And SOLVED!