Bad Alloc with Radeon

[Ken Mandelberg]

I'm running an old thinkpad X22 with a

RADEON(0): Chipset: "ATI Radeon Mobility M6 LY (AGP)" (ChipID = 0x4c59)
  /usr/lib/xorg/modules/drivers//radeon_drv.so
       compiled for 1.6.0, module version = 6.12.1

I get Bad Alloc running any HD video on Linux. However, on Windows vlc 
manages to play the same video.

Is there any configuration I can do to get past this on Linux.