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Yes, it uses VLC dlls, not the application VLC itself

Yes, keyboard shortcuts are defined in the plugin itself. I have not made these customizable. It is not difficult to add this functionality, but since I have a new job and have no use for this plugin anymore, I've decided to stop maintaining it. I suggest you use the Mplayer plugin instead, since that one is still actively being developed. Another option is to add this functionality yourself, the source code is available in the plugins SVN.