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Is VLC legal in all countries?

Probably not.

Specially DeCSS module might violate DMCA (and similar laws) and some codecs would require licenses for personal/commercial use.

There haven't been any court cases related to VLC but specially companies should make sure they pay license fees to license holders if they use VLC commercially and use patented formats or codecs.

This page is part of the informal VLC Support Guide.
Permission is granted to copy, distribute and/or modify this document under the terms of the GNU General Public License as published by the Free Software Foundation; either version 2 of the License, or (at your option) any later version.