I see a terrible performance while trying to play videos with QtMobility 1.2.0 and Qt 4.7.4 on Ubuntu 10.10 (Pentium 4 2.80GHz
I started using QML Video Element and after having several rendering/performance problems with it I finally gave up and wrote a video player element to replace the one from QtMobility.
To whoever might be interested, GStreamer has a C++ interface that is very easy to use.
There is nothing wrong with your code, you are just passing the ball to Qt for the decoding and playback of the movie.
You are either using a build of Qt that doesn't have hardware acceleration enabled, or your system doesn't have the proper hardware for Qt to accelerate decoding and playback.