How to enable hardware acceleration in XBMC 11.0 Eden

Problem: 

I want to enable hardware acceleration in XBMC 11.0 Eden.

Solution:

Enable the following two settings found here:

Settings > Video > Playback > Allow hardware acceleration (VDPAU)
                                                Allow hardware acceleration (VAAPI)

With these options turned on, your XBMC system will allocate to the graphics processing unit (GPU) a large portion of the video decoding process. Your GPU is much more adept at doing these tasks and will thus lessen the burden on your CPU, allowing for smoother playback of video, especially high definition content.