I used the suggest method to insert a downloaded video clip on my hard drive:
1. While on the slide that you’d like to add the video to, go to the ‘Insert’ tab and click ‘Movie’.
2. Choose the ‘Movie from File’ option and select a movie from your hard drive by double clicking on it.
3. Click to indicate whether you want your movie to start ‘Automatically’ or ‘When Clicked’.
4. Drag the video around to position and resize within the slide.
When I completed the steps above I get an image on the slide. When I attempt to play the movie the slide goes blank. I am using PowerPoint 2007 - Windows 7 Sp1