DreamScene has been launched as a Windows Vista Ultimate Extra. Not due for a full release until late 2007, it is available now as a Technical Preview and as such will be unsupported until the final release.
 
DreamScene lets you replace your desktop wallpaper image with a video. It support MPEG and WMV file formats and does require that the computer have a video card that supports Windows Aero.
 
This cool little feature was Developed by Stardock who make some pretty cool software for customizing the Windows desktop. They have offered utilities to customize the Windows Desktop for years now, and in case you thought this was unnecessary with Windows Vista, checkout what they have planned: http://www.wincustomize.com/articles.aspx?aid=142507

While full screen video is the coolest feature, DreamScene also adds the capability to fill a background with an image without distorting its size and includes new positioning options for backgrounds (not just videos, but traditional wallpaper images as well).

For notebooks, DreamScene does look to your power settings and will pause video to conserve battery power. Yes, this will certainly impact performance, but if you have a multi-core processor chances are you have lots of free power going to waste. So heat up that system and get that computer working for you!