In the ten or so years I've used it, I've only come across one file that VLC wouldn't play (excluded DRMed files) - a (possibly malformed) 24hr long MP4 I recorded a few years ago. Pretty much everything chokes on it (VLC crashes straight away), though oddly enough Windows Media Player handles it fine until you try to seek to a different time.
I've dabbled with other media players/codecs in the past, but usually end up back at VLC not long after due to its versatility. Impressive stuff.