Does android separate the module between video player and video codec? If so, how do we install more codec to the system?

The settings menu in CM6 lets you change the maximum per-process heap size (internally, that’s the dalvik.vm.heapsize property). What are the practical effects of raising or lowering that setting? On my G1, I changed it to 12m from the default of 16m, and I noticed that switching applications feels faster, but I wonder if it will cause some applications to run out of memory sooner.