Does android separate the module between video player and video codec? If so, how do we install more codec to the system?
The video codecs are limited to what is supported by the device. This suggests that the codecs are in firmware and not software codecs like you are used to on the computer. This means you will probably need to use something like Handbrake to convert your videos to the phone. Unless there are in the h264 or 3GP formats that all android phones support.
Reference: Act1 Video Player FAQ