This is prolly your error :
Your input can't be opened:
VLC is unable to open the MRL; Web Address of the file; Check the log for details.
2 things cause this error ;
Make sure your AVS/Firewall will allow VLC internet connection.viewtopic.php?f=24&t=68629
here is a post on the same thing.
Also I have had this problem when the host sites have excessive load and they won't let you connect. Try different source with less load or wait and try later and it will work.
i try the option of 'open' this is streaming should connect to the host and automatically play the file
the option of 'save' this will first download the file to your hard drive then when it is finished it will automatically play the file.
The save option is the same as downloading except it will open the player automatically and play the file when finished.
From whatever file source your trying if you use the download button and download you will see the speed of the download in kbps you will need to look at the download speed from all the hosts and decide which gives you the best speed from where you live. Then I would use that host or hosts for streaming when you can and download from the slower ones. This will help with the start/stop/buffer problems and the cannot connect error.
Or you can use divx like before and pause it and watch the progress bar at the bottom of the player buffer a cushion before starting the file. For the newer file formats you will have to upgrade the divx player.