There is hardware support for 1080p H.264 and MPEG-4 as standard. VC-1 and MPEG-2 can be played at 1080p with an optional licence.
VP6, VP8, and Theora have GPU accelerated support, but that is limited to DVD resolutions.
From Helix, other formats will be decoded in software on the ARM. This may handle SD resolutions of older codec like DivX 3, msmpeg and sorenson spark, but higher resolutions may not keep up.
All audio formats (including DTS and AC3) should be supported, but True-HD may require overclocking.