This isn't about just playing video. This is about integrating video into the web instead of leaving it partitioned in a plugin somewhere. None of my Firefox extensions can interact with Flash video (except AdBlock which just removes it from the page). On the other hand, you can use javascript and canvas to do really cool things with video in the browser.

Examples:

http://hacks.mozilla.org/2009/06/add-ambiance-to-your-videos...

http://hacks.mozilla.org/2009/06/connecting-html5-video/

http://hacks.mozilla.org/2009/06/pop-art-video/

and the same with audio:

http://hacks.mozilla.org/2009/06/exploring-music-audio/