Dave, thanks for the reply. I was also using XBMC before and on the rare occasion that a file had a problem with Mplayer, it would always play with DVDPlayer. Just anything HD was a no-go, that's how I started looking into LMCE...
How patient are you exactly when you start these .evo files? On my system, I also get a black screen for a while, but then the file starts. I noticed that Mplayer is actually buffering (by running it once from command line) and this can take a while on a big file.
I would recommend using the "locate" shell command to find mplayer.conf. If it's missing, you can install the locate package with "apt-get install locate", and then issue a "updatedb" (takes a while) for it to scan all your files. Then you will want to find out if the mplayer.conf you;re editing is actually being used/parsed by Mplayer in LMCE :-) That's where I stopped I think.
As for building a new mplayer, I did that successfully, and it improved things a little: it would no longer crash when I press fast forward or pause. I just built it from the most recent LMCE source, and then copied the binary over to the right place. You just again need to make sure that you're putting it in the right place, as there are several instances of mplayer on the system if I remember properly, one used by kde and one for LMCE.
What I did was rename them all to mplayer.old, one after another, and see when LMCE would no longer find mplayer, telling me that I hit the right directory.
A good idea would also be to try running your video file with the same mplayer binary, from KDE, and see if it works there, then at least you know that it's not mplayer's fault. Just make sure that you're using the same binary, because simply typing mplayer will not refer to the binary used by lmce if I remember correctly.
Of course you risk messing up your entire system when you start playing with the files like this but I'm sure you knew that :-)
Hope it helps, and please share any findings. My conclusion was that I would use mplayer in KDE to watch mkv files until the next release of LMCE, but then I hit a problem with missing sound in mplayer under KDE, that I haven't fixed yet.