Im not sure about the rest of the versions of windows but in windows98 while in any folder, if you go to:

View
Customize this Folder
Create or edit an HTML document
Next


you get what i believe is the html document for the folder design. if you dont have this option i have uploaded a replica .txt copy to my site you can find it here:
http://www.angelfire.com/jazz/coolin/folder.txt

about two thirds the way down, i found this piece of code:
Code:
if (wantMedia && size) {
// show media preview or thumbnail based on file extension
ext = name.substring(name.lastIndexOf(".") + 1, name.length);
ext = ext.toLowerCase();		
if (ext == 'avi' || ext == 'mov' || ext == 'qt' || ext == 'mpe' || ext == 'mpeg' || ext == 'mpg') {
// show a movie player
document.all.Media.innerHTML = '<object ID="Player" style="width: 160px; height: 148px" classid=clsid:05589FA1-C356-11CE-BF01-00AA0055595A><param name="FileName" value="' + items.Path + '"><param name=ShowDisplay value=0><param name=BorderStyle value=0></object>';
} else if (ext == 'aif' || ext == 'aifc' || ext == 'aiff' || ext == 'au' || ext == 'mid' || ext == 'rmi' || ext == 'snd' || ext == 'wav') {
// show a sound player
document.all.Media.innerHTML = '<object ID="Player" style="width: 160px; height: 28px" classid=clsid:05589FA1-C356-11CE-BF01-00AA0055595A><param name="FileName" value="' + items.Path + '"><param name=ShowDisplay value=0></center></object>'
}
}
im not sure if this has much to do with it... but my question is:

is it possible to make a folder that when viewed in thumbnail mode all video files are thumbnails of the video playing? || or when clicked on, the left panel showing a small preview of the video playing? like when u click on an image it shows a thumbnail of the image. Is this possible?