I agree, the lack of video support on the Redfly is its main drawback.
Back last spring I remember playing around with trying to get the Windows media Player to do anything useful with video but I had no luck.
More recently, Redfly employee Colin Kelly said:
Video support is one of the most requested features from customers (and from our staff too, we all want to watch videos on the larger screen just as bad as anyone else). It's not an easy task (both bandwidth and compression issues), but we're working on multiple options so stay tuned.