I found another thread that mentioned the WAIT error in the Xorg log:
gimpel mentioned that a motherboard BIOS updated solved the problem for him.
I tried the same, and it worked!
In my case, I have the ASUS M2A-VM HDMI motherboard (http://asus.com/product.aspx?P_ID=DkEhMfgo4ExcGXpn
I was at an old BIOS version 0502 (2007/04/03) and upgraded to version 2302 (2009/02/13) using the FlashROM utility (http://www.flashrom.org
I am using the nVidia driver 195.30 beta, if that matters.
I hope this helps somebody out! Now I am going to test out VDPAU!