Scott, there's one thing saying it should do it amazingly better than a six year old Powerbook, but the sad reality is it can't very well. It DOESN'T. Shoulda coulda woulda. No, it doesn't. It's saddening that your obsession with a piece of aluminium is leading you to gip a guy out of hundreds upon hundreds of dollars.
To make sure I'm not crazy, I'm typing this from my mom's 1.86GHz MacBook Air Rev B. (128GB SSD) I tried to play "The Transporter 2" in 1080p via VLC, no luck at all. Dropped frames constantly, completely unwatchable.
720p was better than I thought, but you still get video lag and blur every 3-4 minutes.
Scott, you're an MBA advocate and we all get that, but it's a crime to force someone's mother to get the laptop over a laptop made for power when you know very well the MBP would outperform it.
Even the baseline MBP has a better clock speed than the top of the line/out of his price rang MBA. GPU is a big deal (and the Rev B's is slightly slower than MBPs of today, but the Rev C's isn't), but the processor matters to in playing it.
OP, this is all I can help with. On two different MBAs, and even my friend's making it three, the MBA has underperformed greatly with HD. It is a phenomenal laptop, very portable and nice to look at. But it is simply not a workhorse, Apple didn't make it to be. It is capable, but not nearly as capable as a MBP, as it is a POWER machine, versus the MBA being an ULTRAPORTABLE. Power is the MBP's goal, portability is the MBA's goal. Simple as that.
So, OP, here are your options.
Take the MBP and be guaranteed better performance, as it simply is specced higher, regardless of our experiences added to it. You save money from the high end, and you're guaranteed speed. Take the money you saved and buy a 80GB Intel SSD and you'll outperform the MBA in every way possible.
Or, take a massive gamble with the MBA, completely ignoring our poor experiences with it as well as the experiences you've read with other threads, and pay more for a weaker machine that weighs about a decent size water bottle's weight less than the MBP.
To me, the decision would be obvious, and if HD wasn't criteria, I'd recommend the MBA, but HD is something that the MBA greatly struggles with, so I'd highly advise against it.
*switches back to MBP*