Update: Chris Blizzard has a neat screencast showing the bookmarklet and player replacement in action.
There's been some interesting demo's of <video> usage and manipulation discussed in the TinyVid Feedback comments section.
One user, hansschmucker, has done some nice demonstrations of what <video> can offer.
To use the bookmarket, visit the bookmarklet page, click on the button that appears there and bookmark the resulting page. Next visit a TinyVid video and visit the bookmarklet. The built in player will be replaced by the new one. This will also work on many pages that use video using the built in controls, for example this transparency camp video.
This example show's it's possible for users to create and customize their own video players and use it on sites of their choice which is pretty nice.
hansschmucker also provided some demo's of using <video> with <canvas> that allow you to view a video in 3D using red/cyan glasses. I've copied his comment from the feedback page below:
Using VIDEO as data source for 3D
I just wrote a little demo to demonstrate how powerful VIDEO elements can be as data source: This little script (it's 20 lines for god's sake) uses a video (which was also produced via JS by the way, thanks to Radiohead's choice of using simple CSV for the data, the power of Canvas and a bit of base64 decoding) to offset pixels in a randomly generated noise map, saving the original map as red and the altered image as red/blue.
You just have to get out your red/cyan glasses and you'll be able to enjoy the video in 3D. Lots more could be done with proper optimization (in fact, the whole thing may be done as a set of SVG filters) and just a little more attention to detail (random noise is possibly the worst thing you can use for a map), but it's still amazing how easily you can create something amazong with VIDEO. ... Two more variants: uses a prerendered noise (looks much better) and warps the source image itself which probably makes most sense here.