I have the same problems as Blinky did - using videos makes MaLa stop responing to keypresses. The video displays correctly, but all I can do is use the right mouse button to call up the options menu.
I have downloded the suggested codec and made the option selections outlined above, but the changes make no difference.
I also tried designing a new layout as did Blinky, but still no change.
Has anyone else seen this?