There should be no need to manually create symlinks anywhere ever. Let Myth and LMCE do their thing without mucking with it under the covers. On a properly setup system all the MythTV recordings will show up in the LMCE Videos with proper titles without intervention.
As to xine playback, there is a known bug that affects at least some of us including me. After a while Xine_Player video playback can get choppy/jumpy. This may be what you are seeing. For now the easy work around is to do a quick router reload. Next time you are seeing choppy video do a quick reload and see if it goes away. Beyond that my recorded TV shows play the same from LMCE and from within Myth.
We suspect there to be a small memory leak in Xine_Player but haven't gotten really around to looking into the issue, reloading the router restarts it fresh again.