VLC Playback is lagging and Severely Choppy on Mac Mini

Is it playing from movies stored on its internal hard drive, or trying to play them from a drive elsewhere on the network? If the latter, please describe the network.

If it is playing them from a network source, as an experiment, copy  one to the internal hard drive and play it from there to see if it makes a difference.

media files are stored locally on the Harddisk

Was video playback smooth previously and only happened recently or has this issue always existed?

There could be several factors which may be  at issue:
Can you give us the OSX version.
Basic spec. of the Mac Mini (CPU, RAM, HD size)
Video file format (encoding) and resolution
Screen size and resolution

System Profile pdf attached. It has the full specs of the mac mini. the file format that we have observed this behavior inis .mov, however I have not tested the rest yet...
system-profile.pdf

You have 4 gigs of RAM OS 10.8.5 and lots of free space on the hard drive, so none of those would appear to be the problem unless you are trying to run really huge .mov files.

Could you please advise as to the resolution of the .mov file?

Could you please run such a file on VLC  or a minute or two and then copy and paste the portion of the console logs for that time frame in txt format? Thanks.

GeoLearn .. sending the whole system profile is not particularly helpful as it is 99% full of irrelevant information.

I can see you've 4Gb of RAM and running OS X 10.8.5 and the MacMini Processor Intel Core i5 2.5 GHz
 Number of Processors: 1
 Total Number of Cores: 2
 L2 Cache (per Core): 256 KB
 L3 Cache: 3 MB
 Memory: 4 GB
 Serial Number (system): C07LJAP4DWYL

The screen is a Lenovo LT1421?? Running over USB?? IS that correct?  IS that the only monitor?  Do you have another screen attached?

However you've not answered the questions on the MOV file .. what resolution?

You need to test a few other video files too to confirm if it affects all video files or just this one.

the issue is persistent across multiple files. most of the content we are calling up is at least 720

Good catch on the monitor, Eoin. That is likely the problem. That monitor is not supported on Macs without third party drivers, and it sound like they don't work all that well. See:

http://www.laptopmag.com/reviews/accessories/lenovo-thinkvision-lt1421.aspx

especially where it says:

"Though Lenovo doesn't offer drivers for platforms other than Windows, DisplayLink--the company which makes the controller inside the ThinkVision LT1421--has compatible software for Mac available on its site. After installing version 1.6 of the DisplayLink USB driver on a 2011 MacBook Pro, we were able to attach the LT1421 without a problem."

and

"When we attached the ThinkVision LT1421 to a 2011 MacBook Pro and tried playing the same 1080p MP4 file we had run on the ThinkPad, we experienced noticeable jerkiness that went away the moment we dragged our video window back to the laptop's main screen. Considering that the Mac uses a different driver on its operating system, this could be a software issue."

You can get a mini-display port to VGA or mini-display port to DVI connector to connect a VGA or DVI monitor to the Mini's Thunderbolt port and this will likely solve the problem.

it is not monitor codependent, we have tested it on a larger monitor via HDMI input

Make sure you are using the latest version of VLC which is 2.1.2.

Assuming you are, try changing the VLC cache size:

Settings -> Preferences and choose Input/Codecs. tick the All option to display advanced settings. Goto Access modules -> File and increase Caching value from 100ms to something like 800ms.