here is a cool alternative to adding video to your desktop background without hogging system resources and memory. It will work in any Windows Vista version and Windows Xp. Here’s how it goes.

1. Download and install VLC Player for Windows.
2. Run VLC Media Player, go to Settings -> Preferences, expand Interface and click on wxWidgets. In the bottom right corner of “wxWidgets interface module” window, click on “Advanced options” to show advanced settings. Then uncheck the Taskbar check box in order to remove VLC Player title from the taskbar while the program is running. Check Systray icon if you want to enable Systray (system tray or notification area) icon instead.
3. Next, expand Video -> Output Modules and then select Direct X. In bottom right corner of DirectX Video Output window, check the Advanced Options check box in order to see all the settings available.

4. Check and tick the “Enable wallpaper mode” check box.
5. Then, select Playlist and then check or tick the Repeat current item checkbox.
6. Press “Save” button when done.
7. Open and play any video that you would like to set as motion wallpaper in VLC Media Player.
8. If the video hasn’t yet been set as desktop background, right click on the video and click on “Wallpaper”.
9. The video or movie will be set as if it’s DreamScene motion desktop background wallpaper.

Now important thing is to configure VLC Player to loop the video . This can be done by simply clicking on View then select Playlist. Now highlight the video that is playing and by clicking on Repeat One or Repeat All button .

But make sure the video format is supported by VLC Player such as MPEG, AVI, MP4, WMV, FLV (Flash Video) and etc. If it isn’t simple convert it to the above files.

Another alternative is BS.Player. Just download and install the BS.Player. Run BS.Player and open your favorite movie or video clip that you would like to set as desktop background.
Then right click on the video playing on a window, and select “Desktop mode” on the options menu. Alternative, you can just press D shortcut key. Wow, your desktop is now playing video, without interfering with other desktop features.
[via:thinktechno]