VLC for Windows Phone has been updated and it fixes the broken audio issue. You can play music or videos that are stored on the SD card or on the phone and you can browse the SD card. Video playback worked great with my tests, I know some people have had issues with video playback glitching but I didn’t have any problems on my Lumia 1520. Background audio hasn’t been implemented so you won’t get audio once you switch away from the app but that will be added soon.
The UI looks great and it’s great to finally have VLC on Windows Phone. The app in private beta at the moment.