Among all the media players that are available on the market, VLC is known to be one of the best for two reasons. First, it comes with a wide variety of video codecs, thus being the ideal tool for opening any file format, and second, it is free. Some philosopher from olden days said wine should have three qualities: it should come in large quantities, it should be good and it should be free. The analogy needs not be written.
The 'perfect' status of the player is, however, flawed, because of the security liabilities it was discovered to have in its latest versions. The vulnerabilities can be exploited by remote parties and leave the PC running VLC open to arbitrary code running, according to Secunia's Luigi Auriemma.
Getting down to the nitty-gritty, the problem occurs whenever a subtitle file is loaded into the player, this action causing a buffer overflow easily exploited by mal intended individuals. Don't be comfortable behind your Mac or Linux screen, used to most of the problems affecting the Windows Operating System, this vulnerability is platform independent, so beware!
The liability was first reported with the 0.8.6d version and the developers took it onto themselves to patch it up right away. Or at least that was the plan, the 0.8.6e version was supposed to be bug-free but it actually isn't, although work was clearly done. Two fixes have come, first the format string error in the web interface listening on port 8080/tcp was resolved, and the "ParseMicroDvd()" boundary error was removed, but there are two other similar left and they're rated Highly Critical by Secunia. Boundary errors in the "ParseSSA()", and "ParseVplayer()" functions when handling subtitles can be exploited to cause stack-based buffer overflows.
The solution, Luigi Auriemma says, is that everybody update to 0.8.6e and do not process untrusted subtitles using the VLC player.