Dude! I'm so stoked I had to tell you all the follow up! I set this 8 year old Mac up, and the first thing I did was test full screen video playback, and guess what? It works flawlessly!!!

I was wanting to set up a media server, but I just bought this machine to be an internet and word processor, I didn't think this ancient machine would be able to decode modern video compression formats. But it can! I can't believe how powerful and useful these 8 year old Macs are! It's so awesome! I'm gushing!
I thought I'd have to buy another newer old mac to setup as my media machine, but this single old machine is so powerful that it can be my computer for internet, word processor, video play back, audio playback, download, print station, scan station, etc. etc. and everything else station! Now I can dedicate my 1ghz powerbook to things that need portability so I don't have to constantly be plugging it in and out of the tv, stereo, scanner and everything else which'll just stay connected to the 400 mhz machine and I'll also dedicate my laptop to things that take more horse power, like music production. Of course, this machine's power has surprised me so much, is it possible that it'll be faster and more powerful in music production than my 1ghz laptop???

Could it possibly be? There's only one way to find out!
That was some of the best $85 I've ever spent!