If you've ever tried playing an odd video format on your phone, chances are you've used one of a couple of well known video players like MX or VLC. After a slow start, the latter has been receiving rather frequent updates and improvements that keep pushing it forward. VLC also has an active beta program (of which you can be a part by joining this Google+ community and then becoming a tester on the Play Store) and its latest release is version 1.9.0 which is actually a beta for version 2.0.0. Let's pretend that's not unnecessarily convoluted and move on.
This version adds a couple of important features to VLC. First is the option to browse network storages from various protocols (UPnP, NFS, FTP, SFTP, smb, Windows Shares, and more). Next, when you find a network folder you'll frequently check or when you visit a URL that you'll likely need later, you can favorite them through a new title bar icon. Video playlists are also supported now, and there are changes to notifications and the history section.
One more important change is the fact that the Android and Android TV versions are now merged, allowing users to manually set the Android TV interface on other devices like phones and tablets. It can be useful if you have an Android device connected to your TV with a Bluetooth controller: this UI is obviously better suited for remote controlling. The setting to enable the layout can be found in Settings > Interface > Android TV interface.
VLC on Android 2.0.0 Beta (1.9.0)
2.0 introduces a large number of features, notably network disk browsing (Windows shares, UPnP, NFS, FTP, SFTP...), favorite folders and URLs, video playlists, rewritten notifications and control and a rewritten history.
It is also a merge of Android TV and Android versions, so that every device can optionally get the Android TV interface. The TV interface has been improved quite a bit too.
Finally, it should be faster to decode and playback all video types.
You'll need to follow the steps mentioned at the beginning of the post to join the beta program in order to see this version 2.0.0 (which, I reiterate, is officially called 1.9.0) in the Play Store. Otherwise, you'll still be on version 1.7.3.