VLC will play most any video codec, as well as movies on DVD (you'll need to install Lubuntu Restricted Extras and libdvdread4). To watch commercial video online in Firefox, you'll probably want to install the Hardware Abstraction Layer (HAL) and enable HTML5 DRM. And some video subscription services like Pure Flix or Netflix may work better in Google Chrome. But, you can stream video through VLC too. Or, if your computer is too old / not powerful enough to smoothly playback online video; you may download video to your hard disk first and play it later with VLC.
LUBUNTU RESTRICTED EXTRAS installs various non-free codecs and plugins including ffmpeg, Flash 11.2.xx (32-bit), fluendo-mp3, gstreamer and Microsoft fonts.
Go to Menu --> System Tools --> LXTerminal (or Ctrl+Alt+T)
Type (or copy and paste):
sudo apt-get install lubuntu-restricted-extras -y[Enter]
EULA for Microsoft fonts: Hit [Tab] to select <OK>, [Enter] to "press" <OK>, left arrow to select <Yes> and [Enter] to "press" <Yes>.
sudo apt-get update && sudo apt-get install hal libhal1 -y
DRM-protected HTML5 audio and video can easily be enabled in Firefox. Simply go to the Content menu in Firefox (Menu --> Preferences --> Content) and check the "Play DRM content" check box.
If your computer has a DVD drive and the Lubuntu Restricted Extras package was already installed; add libdvdread4 to play DVD movies:
Go to Menu --> System Tools --> LXTerminal (or Ctrl+Alt+T).
Type (or copy and paste): sudo apt-get install libdvd-pkg -y [Enter]. In the pop-up dialogue box press [Enter] to select <OK>, then press [Enter] again to select <Yes> to enable auto-upgrades. Back in LXTerminal, type: sudo dpkg-reconfigure libdvd-pkg [Enter]. In the next dialogue box, hit [Enter] to select <Yes> to download, build, and install libdvdcss2.