As a former owned of an ATI 2600, I feel your pain. If you are looking for a program that will use the GPU to help decode the file you are out of luck. VLC just added hardware acceleration to 1.1 and the issues that you will run into are:
- It is somewhat buggy and crashy.
- It only works on the the 4000 and 5000 series cards.
Your best bet is to go with Media Player Classic Home Cinema, which is included with the K-Lite Codec Package which I really fancy. It seems to work with most GPUs, new and old, assuming you have current drivers.
Check FileHippo for K-Lite, you won't regret it.
Please note that this will only use the GPU on certain files, like x264, so if you're using something else, your mileage will vary. Make sure, when installing K-Lite, you check the box for GPU acceleration, or it will be all for not.
Source: I watched the 1080p version of the Dark Knight with a HIS 2600 XT four months ago in Media Player Classic Home Cinema. Poetry in motion.