It's pretty bad unfortunately. I don't know why, but the built-in video playback just doesn't run smoothly, at least for high resolution games. On some PCs even the audio stutters. Other video formats work much better, maybe because they are not played by AGS? Of course the best solution would be to improve the performance of the built-in OGV playback, because it doesn't depend on any codecs being installed, but for now we'll try our luck with H.264.
I don't know much about Windows codecs, is it safe to assume that the H.264 codec is installed on current Windows machines?