I think I'm getting closer to fixing the stuttering images in 1080p. Looks like there is not hardware DTS support, so I'm trying a rip with just standard stereo. Judging from the forums, this seems to be a big contributor to the framing issues at 1080p. At this moment, I've overclocked the CPU and GPU as well as the memory and that has helped. I've also expanded the cache for XBMC to around 30MB. Simply switching to dolby in XBMC seemed to help a bit, but it would still stutter from time to time.
One other thing I'm going to try is to take my new 3TB drive and share it as a nfs share. People claim there's alot of CPU overhead with SMB, so this is a way to combat that. It's getting better though.
One other issue. I bought the MPEG2 codecs and can now play .VOB files, but the RPi version of XBMC won't play the files contiguously. I basically have to play the individual 30 minute chuncks to make the way through a movie. This doesn't happen on my Windows 7 Nvidia Ion2 box, so this is just probably a setup issue on my part or the part of this build of XBMC for the RPi. Probably can figure that out though, but there is not real help on the webz at this point.