|What kind of video file are you trying to play (h.264, xvid, mpeg2....)?|
It's possible that VLC requires a CPU with SSE (P3/Athlon). The K6-2 never was a great multimedia CPU, so if you get it to work, you'll have to stick with low-res video files.
Try using WMP+seperate codecs. My old 333MHz P2 (no SSE) can play Xvid (avi) and MPEG4 (mp4/mov) files using the Xvid and CoreAVC codecs, Haali Media Splitter, and WMP11. I've never tried VLC on it.
It's also possible that the SiS 530 crapset is causing the error. The Socket 7 SiS IGPs are extremely limited and slow. If this is your only computer (ouch!), head over to eBay and buy a PCI Radeon 7000. It will greatly boost video and system performance. Those old SiS Socket 7 chipsets cut memory bandwidth in half when the integrated video is used. This really hurts performance on K6-2 systems because the memory and external L2 cache share the same bus. Installing a PCI video card will return that much-needed bus bandwidth to the CPU.
Socket 939 | Dual-core Opteron 185 @ 3.2GHz | 4GB | 1.0TB | Win7 x64
GeForce GTX 460 1GB | X-Fi Ti Pro | A8N32-SLI Deluxe | Antec P182