Sadly the answer isn't simple. Video has always been a problem in PowerPoint and still is (for different reasons in 2010)
So:
1. 2007 and 2010 insert video in totally different ways. In 2007 video is always linked and will not play if the link path is too long. (That's the probably unknown path the presenter used) Best practice would be to o=put the video and presentation in a single folder with a short path (say C:\PPTS\ and reinsert them. Not simple if there are hundreds. Sometimes just moving everything into one folder will work.
2010 embeds video by default and plays it using much newer software (Direct Show) Playing these back in 2007 is likely to give problems. If you do not have at least Service Pack 2 on PPT 2007 it will definitely fail. With the pack it is supposed to play but will not reproduce the effects you can add in 2010. Best practice is use 2010.
2. Embedded video in 2010
This is supposed to "just play" but doesn't always! The problem is that Direct Show can be programmed by third parties with little control and sometime the added code will conflict with attemps PPT makes to play the video (or sound file). The worst culprits are programs which come free with PCs" suspect DVD writers (not needed in Vista onwards) and Video editors / converters. Best practice is zap anything you don't really need.
3. You tube#
In 2010 the abiility to link to You Tube video was added. Obviously this need a web connection but also a recent update from Adobe has killed it. There's a page on our site here.
http://www.pptalchemy.co.uk/You_Tube...%27t_Play.html
4. Changing the extension.
This shouldn't work unless the user already changed it (possible in my experience) but I have also seen it work with the correct extension. I'm not sure why but I always suspect the original user has done something strange! I was running the Help Desk at The Presentation summit in the US when someone presented a PPt with Video that "Didn't play" Turned out he had made the video on a very old VHS camera, converted it to quicktime and then used a free converter to convert it to avi and then used the trim controls in 2010 to reedit and then ....
Short black screens are difficult to avoid. The faster the PC usually the less of a problem it is but the graphics card is working hard here!
some cards simply cannot cope with two video outputs (screen and projector) so setting the output to just projector often works. A better card is the real answer.
I know none of this is a definitive answer but it might help.
John (also in the UK)