It plays literally everything. We regularly had sponsors show up the day of the show and hand me a USB drive with their ad reel on it. With no clue what the format would be, I would always be able to say, "yeah, we can put it in the playlist for tonight".
It has excellent playlist abilities, and excellent means of controlling the playlist. Our shows often included multiple sources (live video, sponsor reel, feature, short, trailers, etc.), and being able to manually select the right things at the right times with keyboard shortcuts was great.
It actually allows one to kill all on screen displays, and can be reliably configured to always open video on the secondary display (projector) and controls on the primary display (laptop). This is shockingly difficult with every other player I used. They would always have problems getting things onto the right display, or would show some kinda bullshit on the screen. This is particularly true of the DVD and Blu Ray capable players; they're an utter shit show, even if you pay a bunch of money for them.
So, thanks! I love VLC bunches. I've donated in the past, and will certainly donate again.