The way I do it is put a video box over the snap box, exact same size. Then set the video delay for 1s. Videos always play on top, no matter where they are in the z-order, BTW.
Sorry to dig up this old thread, but I've just converted a new MAME cabinet and the 'blue' layout suits its colour theme perfectly. I'm also wanting to use videos this time, which I have working but have encountered the same issue where they are 'always on top' of other layers, so the transparent 'circular window' of the blue theme doesn't cover up the edges of the video like it should (and like it does with snaps).
Is there any hope that in a future version of Mala, you will be able to put other layers on top of the video? If not, I'll have to consider using another theme (I really don't want to) or living without videos. The option of making videos so small that the whole square fits within the opening of the circle just doesn't look right either.
Alternatively, is anybody willing to have a go at converting the "Blue" layout background images to have a 'square' window with rounded edges, rather than a circle window?