Video can play back in the now playing area, as part of the slide show or it can be shown as full screen. To show full screen just double click the playing video. When you have slide show enabled, then the video will appear in the slide show area when the slide show starts. See also Image Viewer / Slide Show. Settings for video you can find in the Video  page of the preferences.

Important Note: The video playback has some limitations. The audio is directly playing back over the audio device. This does mean that the equalizer or any other DSP functions are bypassed. Depending on the video renderer selected in theVideo  page of the preferences it plays back over the default audio device or the same audio device as for the regular audio playback selected in the Audio  page of the preferences. ASIO is not supported. Also it is not possible to automatically calculate any Replay Gain values for Normalized audio playback. Still it is possible to enter negative Replay Gain values yourself for the each video track, because this level is then used to lower the volume level of the video. Despite the limitations, the use of video can still bring a lot of fun.

The video playback player is an DirectShow based player, which means that it makes use of codecs installed on your computer. The supported video file formats fully depend on installed codecs. There are many codecs available. But if you have none installed or still missing codecs my advice is to install K-Lite Standard. It gives you the most important codecs you need.