VLC can't take snapshots anymore due to corrupt VDPAU video surface error
Answering myself.
The option at Preferences->Video->Use Hardware Acceleration controls how graphics are drawn on screen, not how videos are decoded. The option to disable VDPAU is at Preferences->Input & Codecs. Then look for "Hardware accelerated decoding" and change VDPAU for any of the other options, I'm using X11 VA-API.
And problem solved. I can take snapshots again. I will remain with Hardware decoding disabled until the problem is fixed, probably at the side of the VDPAU driver library (just guessing). No perceptible lag while playing videos so far.