Initially watching that video I just thought ah well, i've always had to reencode video for watching on my mobile. Plus, what good is 720p or 1080p on a qHD screen. But then I thought, hey if the SGS2 can do it then it's only reasonable to start expecting this sort of performance from phones. It's not a requirement of a phone to play full HD files, but it's getting to the point now where it'd be nice and we shouldn't have to re encode files for mobile viewing.
I suppose everyone's opinions will differ, and I don't really NEED to watch files via my phone. All in all i've found it very decent hardware for what i use it for. Main issues are software ones for my use. And it's a sturdy phone to hold.