It does work, but it's very stuttery.
So I think either overclocking your N900, watching an embedded version of the video in a lower resolution or downloading the video from vimeo (you have to be logged in, and the author of the video has to have allowed it.
...not realy - oc mine to 900Mhz - even if I switch off HD it's still stuttery (over 3.5G); maybe WLAN is different; but I do not think so; the vimeo player is very good and buffers the first seconds before playing. So no - overclocking does not help :-(
Just tried Vimeo ove WiFi with my N900 overclocked to 1150MHz and non-HD videos still stutter :-(. Much more watchable than at 850MHz but not nearly as good as I'd hoped.
You should be able to write a GreaseMonkey script to download the MP4 file and play it outside of the browser. I can see the file in FireBug on my PC but it has an auth token. Anyone got the time / skills to give it a go?
Most sites like keep-tube.com seem to use a Java applet, which won't work on the N900.
Update: the user script http://userscripts.org/scripts/show/56677 lets you download the MP4 files to your device fine but the default media player doesn't have the codecs to play the files.
I can get 50mb via my wifi, with higher quality videos i can hear the sound while playing but video just does not move, but there other videos available that will play, for example i got some videos i took with my n95 and those work fine.
Vimeo does also offer the original file to download but you need to login, but that file normally is even higher quality then the embeded one.
would be interesting to see if any phone will be able to handle it.
I've just installed mplayer and the SiB front end and it plays videos downloaded from Vimeo using the greasemonkey download script above perfectly. My N900 is overclocked though, so I don't know how well they'll play on a non-overclocked N900.