Home Screen Movie
NOTE: Playing movies on the home screen is rather hard on the phone: your battery will drain fairly quickly and the phone will get very hot.
Click on the 'Select...' button to get a file selection dialog.
Navigate to the Videos folder with the disk paths menu, or to any other folder.
You can also drag movies from disk or a website directly into the movie area. They will be copied into the Videos folder. The background movie is named 'Wallpaper.mp4' and is at the main level of the theme folder.
Click the 'delete' button to delete the movie from the theme folder.
Click the 'play' button to view the movie.
The movie plays underneath any wallpaper image, so an image can have transparency and the movie will be visible through the image. You can show widgets on top of a movie - set the widget background to 'None', choose a somewhat transparent background or use conditions to show or hide the background.
Movies are centered on the screen and repeat endlessly - you may want to pick a movie without sound or remove the soundtrack.
Movie is not accepted by iFuntastic or won't play on the phone
iFuntastic goes by the extension of the movie. Acceptable formats are m4v, mp4. mov is ambiguous (it could just be a sound) and may have other problems, therefore it is rejected. Use QuickTime Pro (File -> Export..., export as 'Movie to iPhone') or some other method to convert the movie to the another format.
Sometimes movies stop playing for no apparent reason. Restart the SpringBoard to get it going again (Select and deselect a WinterBoard theme on the phone.)