It seems to be working, but it can cause a nasty freeze in the UMD Browser for some games due to uncaught NullPointerException in the PmfDisplayThread in the jpcsp.GUI.UmdBrowserPmf class. If the game has a video playing in the UMD Browser when you select it, it will freeze. It won't freeze if the game only displays a still image in the UMD Browser though. With Xuggle 5.4, it seems that the method toImage() in the com.xuggle.xuggler.video.IConverter class returns null. To keep it from freezing, just modify line 457 in the jpcsp.GUI.UmdBrowserPmf class to become:
The above modification will prevent the NullPointerException from happening in line 458 if getImage() happens to return null. I guess there's still a bug in the IConverter.toImage() method in Xuggle 5.4. I haven't done any extensive testing with Xuggle 5.4 yet, so who knows what other bugs lie in wait. I'll try to do more testing. 
Code:
457 if (display != null && getImage() != null) {
458 display.setIcon(new ImageIcon(getImage()));
459 }