Choppy video on fresh install

[L_D]

I have XBian 1.0 Beta 2 installed onto a class 10 SD.

My video is a MP4 with H264 encoding, resolution is 1024 x 576
File is 1.5GB. Plugged a USB 2.0 memory stick straight onto the Raspberry.

The video plays but every 1-5 minutes the video will pause for half a second.

Xbian already overclocks and I removed any Wifi issues here by plugging in straight. What could the issue be? Where does one start.

Secondly, I am a little disappointed that the Linux distro's with XBMC is a watered down version in terms of the codecs it supports. It is not as simple as plugging in and view. You have to convert to the correct formats and you are limited to 1080p.