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I wouldn't recommend h.264 on anything lega than a 400-500MHz processor myself - I had CoreAVC on an Athlon 1200 desktop, and it STILL lagged on videos. With QVGA, I'd suggest turning off b-frames and CABAC in order to avoid a slideshow.
The h.264 codec takes a lot of CPU to decode - the CoreAVC plugin just means it won't take as many as FFMPEG would... But even with full power on an x51v, h.264 at 524x236 can become a slideshow with b-frames on.
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