As someone said I think here and in the big 1.1 feedback thread mentioned about having to use the file manager to launch videos, that seems to be the problem here. Now watching Rambo 2.

Try that out and see if it works, you may have to restart your device if you've already gone in the media player to try and play the movie. I'm going back to sleep

I'll check bugzilla later and make sure this has been reported, I've got another bug with ID tags to report too.