I have a 60 gig white 5g iPod. I actually wanted a black one, but they were sold out at the store, so I just said "F*** it" and went with classic white.
I've watched video in bright lights, and in the dark. They both look great. The video is very sharp and clear, with bright colors. I even put some anime on it, and was able to read the subtitles without any problems (both in light and in dark).
Since I only own the white, I can't comment on how video looks on the black, but I really can't imagine the case color makes a huge difference. But thats just my opinion.
Also, after about 2-3 days of putting it in and out of the supplied case, I had the notorious hairline scratches. I tried toothpaste, but that made it worst, I tried some auto polish, and that had no effect, so I just said "F*** it" (Kind of a common theme with me; I'm a pertty laid back person) and put on the invisibleshield that I had ordered, despite the scratches.
To my great suprise, once the invisibleshield dried, you can't see the scratches. I guess the adhesive fills them in, or because there's a clear layer on top they're not as obious anymore, or somthing. Also, all the pictures I had seen of invisibleshield showed a kind of "wavy" texture on the ipod. While is does look like this, you can't feel it. It still feels very smooth and glossy. If anything, I'd say it feels better than it did before. Putting the invisibleshield on was the best decision I ever made. If I get another iPod, I'm not taking it out of the box till I get my invisibleshield. Its worth every penny I spent on it.