since 1.0.2 a lot of things changed and a lot of rebuilding against system libs were needed.

please fully update your system.

like a side note, please post your pacman -Q package list

This is a brand new, just installed system with LTS kernel. I have encountered the bug in June after upgrading other computers. Back then I used workaround for the bug (unfortunately it is really crippling the setup it is used for), hoping that the issue is going to be resolved any time soon. Installed a new system now and found that the problem still exists.
As per your request pacman -Q output is attached as a text file.

definitely your vlc is too old for your current ffmpeg and x264. please find another mirror http://www.archlinux.org/mirrors/status/ and do pacman -Syu.

then try again and post a log starting vlc with vlc -vv

I have completed an update process from another mirror. Indeed the other mirror was out of sync and this update provided me with a newer version, but unfortunately it didn't change anything:
VLC media player 1.1.4.1 The Luggage (revision exported)
Blocked: call to unsetenv("DBUS_ACTIVATION_ADDRESS")
Blocked: call to unsetenv("DBUS_ACTIVATION_BUS_TYPE")
[0x83a990c] inhibit interface error: Failed to connect to the D-Bus session daemon: /usr/bin/dbus-launch terminated abnormally with the following error: Autolaunch error: X11 initialization failed.

[0x83a990c] main interface error: no suitable interface module
[0x83a4274] main interface error: no suitable interface module
[0x81d68fc] main libvlc error: interface "globalhotkeys,none" initialization failed
[0x83a4274] dummy interface: using the dummy interface module...
[0x826a7fc] mux_dummy mux: Open
[flv @ 0x8386c00] max_analyze_duration reached
[flv @ 0x8386c00] Estimating duration from bitrate, this may be inaccurate
[0x82691dc] main stream out error: Failed to create audio filter
[0x82691dc] stream_out_transcode stream out error: Failed to find conversion filter for resampling
[0x82691dc] stream_out_transcode stream out error: cannot create audio chain
[0x838593c] main decoder error: cannot create packetizer output (mp4a)

The updated package list is also attached

Here is vlc -vv output
VLC media player 1.1.4.1 The Luggage (revision exported)
[0x92268fc] main libvlc debug: VLC media player - 1.1.4.1 The Luggage
[0x92268fc] main libvlc debug: Copyright © 1996-2010 the VideoLAN team
[0x92268fc] main libvlc debug: revision exported
[0x92268fc] main libvlc debug: configured with ./configure '--prefix=/usr' '--disable-rpath' '--enable-faad' '--enable-v4l' '--enable-snapshot' '--enable-dbus-control' '--enable-nls' '--enable-lirc' '--enable-pvr' '--enable-ncurses' '--enable-mozilla' '--with-live555-tree=/usr/lib/live' '--enable-realrtsp' 'CFLAGS=-march=i686 -mtune=generic -O2 -pipe' 'LDFLAGS=-Wl,--hash-style=gnu -Wl,--as-needed' 'CXXFLAGS=-march=i686 -mtune=generic -O2 -pipe' 'PKG_CONFIG_PATH=/usr/lib/pkgconfig'
[0x92268fc] main libvlc debug: translation test: code is "C"
[0x92268fc] main libvlc debug: checking plugin modules
[0x92268fc] main libvlc debug: loading plugins cache file /usr/lib/vlc/plugins/plugins-04041e-3e8.dat
[0x92268fc] main libvlc debug: recursively browsing `/usr/lib/vlc/plugins'
[0x92268fc] main libvlc warning: cannot load module `/usr/lib/vlc/plugins/misc/libnotify_plugin.so' (libnotify.so.1: cannot open shared object file: No such file or directory)
[0x92268fc] main libvlc debug: saving plugins cache /usr/lib/vlc/plugins/plugins-04041e-3e8.dat
[0x92268fc] main libvlc debug: module bank initialized (393 modules)
[0x92268fc] main libvlc debug: opening config file (/home/stream/.config/vlc/vlcrc)
[0x92268fc] main libvlc debug: CPU has capabilities MMX MMXEXT SSE SSE2 SSE3 SSSE3 FPU
[0x92268fc] main libvlc debug: looking for memcpy module: 3 candidates
[0x92268fc] main libvlc debug: using memcpy module "memcpymmxext"
[0x93f8fdc] main input debug: Creating an input for 'Media Library'
[0x93f8fdc] main input debug: Input is a meta file: disabling unneeded options
[0x93f8fdc] main input debug: using timeshift granularity of 50 MiB
[0x93f8fdc] main input debug: using timeshift path '/tmp'
[0x93f8fdc] main input debug: `file/xspf-open:///home/stream/.local/share/vlc/ml.xspf' gives access `file' demux `xspf-open' path `/home/stream/.local/share/vlc/ml.xspf'
[0x93f8fdc] main input debug: creating demux: access='file' demux='xspf-open' path='/home/stream/.local/share/vlc/ml.xspf'
[0x93f525c] main demux debug: looking for access_demux module: 2 candidates
[0x93f525c] main demux debug: no access_demux module matching "file" could be loaded
[0x93f525c] main demux debug: TIMER module_need() : 0.083 ms - Total 0.083 ms / 1 intvls (Avg 0.083 ms)
[0x93f8fdc] main input debug: creating access 'file' path='/home/stream/.local/share/vlc/ml.xspf'
[0x93f524c] main access debug: looking for access module: 2 candidates
[0x93f524c] filesystem access debug: opening file `/home/stream/.local/share/vlc/ml.xspf'
[0x93f524c] main access debug: using access module "filesystem"
[0x93f524c] main access debug: TIMER module_need() : 0.085 ms - Total 0.085 ms / 1 intvls (Avg 0.085 ms)
[0x93f5644] main stream debug: Using AStream*Stream
[0x93f5644] main stream debug: pre buffering
[0x93f5644] main stream debug: received first data after 0 ms
[0x93f5644] main stream debug: pre-buffering done 296 bytes in 0s - 24088 KiB/s
[0x93f588c] main stream debug: looking for stream_filter module: 5 candidates
[0x93f588c] main stream debug: no stream_filter module matching "any" could be loaded
[0x93f588c] main stream debug: TIMER module_need() : 0.062 ms - Total 0.062 ms / 1 intvls (Avg 0.062 ms)
[0x93f588c] main stream debug: looking for stream_filter module: 1 candidate
[0x93f588c] main stream debug: using stream_filter module "stream_filter_record"
[0x93f588c] main stream debug: TIMER module_need() : 0.059 ms - Total 0.059 ms / 1 intvls (Avg 0.059 ms)
[0x93f8fdc] main input debug: creating demux: access='file' demux='xspf-open' path='/home/stream/.local/share/vlc/ml.xspf'
[0x93f5a1c] main demux debug: looking for demux module: 1 candidate
[0x93f5a1c] playlist demux debug: using XSPF playlist reader
[0x93f5a1c] main demux debug: using demux module "playlist"
[0x93f5a1c] main demux debug: TIMER module_need() : 0.072 ms - Total 0.072 ms / 1 intvls (Avg 0.072 ms)
[0x93f5c2c] main demux meta debug: looking for meta reader module: 2 candidates
[0x93f5c2c] lua demux meta debug: Trying Lua scripts in /home/stream/.local/share/vlc/lua/meta/reader
[0x93f5c2c] lua demux meta debug: Trying Lua scripts in /usr/lib/vlc/lua/meta/reader
[0x93f5c2c] lua demux meta debug: Trying Lua playlist script /usr/lib/vlc/lua/meta/reader/filename.luac
[0x93f5c2c] lua demux meta debug: Trying Lua scripts in /usr/share/vlc/lua/meta/reader
[0x93f5c2c] main demux meta debug: no meta reader module matching "any" could be loaded
[0x93f5c2c] main demux meta debug: TIMER module_need() : 0.455 ms - Total 0.455 ms / 1 intvls (Avg 0.455 ms)
[0x93f8fdc] main input debug: `file/xspf-open:///home/stream/.local/share/vlc/ml.xspf' successfully opened
[0x92bdeb4] main xml debug: looking for xml module: 2 candidates
[0x92bdeb4] main xml debug: using xml module "xml"
[0x92bdeb4] main xml debug: TIMER module_need() : 0.109 ms - Total 0.109 ms / 1 intvls (Avg 0.109 ms)
[0x93f5a1c] playlist demux debug: parsed 0 tracks successfully
[0x92bdeb4] main xml debug: removing module "xml"
[0x93f8fdc] main input debug: EOF reached
[0x93f5a1c] main demux debug: removing module "playlist"
[0x93f588c] main stream debug: removing module "stream_filter_record"
[0x93f524c] main access debug: removing module "filesystem"
[0x93f8fdc] main input debug: TIMER input launching for 'Media Library' : 1.207 ms - Total 1.207 ms / 1 intvls (Avg 1.207 ms)
[0x93f953c] main interface debug: looking for interface module: 1 candidate
[0x93f953c] main interface debug: using interface module "hotkeys"
[0x93f953c] main interface debug: TIMER module_need() : 0.079 ms - Total 0.079 ms / 1 intvls (Avg 0.079 ms)
[0x93f74bc] main interface debug: looking for interface module: 1 candidate
Blocked: call to unsetenv("DBUS_ACTIVATION_ADDRESS")
Blocked: call to unsetenv("DBUS_ACTIVATION_BUS_TYPE")
[0x93f74bc] inhibit interface error: Failed to connect to the D-Bus session daemon: /usr/bin/dbus-launch terminated abnormally with the following error: Autolaunch error: X11 initialization failed.

[0x93f74bc] main interface debug: no interface module matching "inhibit,none" could be loaded
[0x93f74bc] main interface debug: TIMER module_need() : 2.487 ms - Total 2.487 ms / 1 intvls (Avg 2.487 ms)
[0x93f74bc] main interface error: no suitable interface module
[0x93f74bc] main interface debug: looking for interface module: 1 candidate
[0x93f74bc] main interface debug: using interface module "signals"
[0x93f74bc] main interface debug: TIMER module_need() : 0.338 ms - Total 0.338 ms / 1 intvls (Avg 0.338 ms)
[0x93f9f94] main interface debug: looking for interface module: 1 candidate
[0x93f9f94] main interface debug: no interface module matching "globalhotkeys,none" could be loaded
[0x93f9f94] main interface debug: TIMER module_need() : 0.082 ms - Total 0.082 ms / 1 intvls (Avg 0.082 ms)
[0x93f9f94] main interface error: no suitable interface module
[0x92268fc] main libvlc error: interface "globalhotkeys,none" initialization failed
[0x92268fc] main libvlc: Running vlc with the default interface. Use 'cvlc' to use vlc without interface.
[0x93f8fdc] main interface debug: looking for interface module: 5 candidates
[0x93f8fdc] qt4 interface error: Could not connect to X server
[0x93f6824] main playlist debug: Activated
[0x93f6824] main playlist debug: rebuilding array of current - root Playlist
[0x93f6824] main playlist debug: rebuild done - 0 items, index -1
[0x93f8fdc] skins2 interface error: Cannot open display
[0x93f8fdc] skins2 interface error: cannot initialize OSFactory
[0x93f8fdc] main interface debug: using interface module "skins2"
[0x93f8fdc] main interface debug: TIMER module_need() : 21.577 ms - Total 21.577 ms / 1 intvls (Avg 21.577 ms)
[0x93f8fdc] skins2 interface debug: closing skins2 module
[0x93f8fdc] main interface debug: removing module "skins2"
[0x92268fc] main libvlc error: interface "default" initialization failed
[0x92268fc] main libvlc debug: deactivating the playlist
[0x93f6824] main playlist debug: Deactivate
[0x93f8fdc] main playlist export debug: saving Media Library to file /home/stream/.local/share/vlc/ml.xspf
[0x93f8fdc] main playlist export debug: looking for playlist export module: 1 candidate
[0x93f8fdc] main playlist export debug: using playlist export module "export"
[0x93f8fdc] main playlist export debug: TIMER module_need() : 0.130 ms - Total 0.130 ms / 1 intvls (Avg 0.130 ms)
[0x93f8fdc] main playlist export debug: removing module "export"
[0x93f6824] main playlist debug: Deactivated
[0x92268fc] main libvlc debug: removing all services discovery tasks
[0x92268fc] main libvlc debug: removing all interfaces
[0x93f74bc] main interface debug: removing module "signals"
[0x93f953c] main interface debug: removing module "hotkeys"
[0x93f6824] main playlist debug: destroying
[0x92268fc] main libvlc debug: TIMER ML Load : Total 1.557 ms / 1 intvls (Avg 1.557 ms)
[0x92268fc] main libvlc debug: TIMER Items array build : Total 0.043 ms / 1 intvls (Avg 0.043 ms)
[0x92268fc] main libvlc debug: TIMER ML Dump : Total 0.295 ms / 1 intvls (Avg 0.295 ms)
[0x92268fc] main libvlc debug: removing stats
[0x92268fc] main libvlc debug: removing module "memcpymmxext"

Here is the debug output from the streaming

can you force changing decoder module? faad was dropped from ffmpeg some time ago

I would be happy if you share with me how.
Have you had a chance to reproduce the problem yourself?

yes. please report to them(as in vlc bugtracker), pasting the latest logs and say that in newly ffmpeg libfaad was removed and i think libfaac should be used

this is in ffmeg changelog
- libfaad2 wrapper removed

I have done some testing now on Gentoo

VLC 1.1.4 + ffmpeg-0.6 compiled without faac and faad - mp3 file is not created, no error, the stream is just playing.
VLC 1.1.4 + ffmpeg-0.6 compiled with faac and faad - the error is exactly the same as reported
VLC 1.1.4 + ffmpeg-0.5 the error is exactly the same as reported
VLC 1.0.6 + ffmpeg-0.5 works as expected