Later versions of PPT do have some improvements in playing videos, although
more important is having the movie file created properly.
Check here for a quick explanation of how movies work with PPT: http://www.tlccreative.com/images/tutorials/movies.htm
Check here for a good overview on the details of PPT and multimedia: http://www.rdpslides.com/pptfaq/FAQ00099.htm
If you want to assure your movie files are created in a MS friendly codec,
are the optimized size, etc., I recommend the PFC Media add-in: www.pfcmedia.com