As seen in the below screenshots, Facebook Widgets now feature and play video in-line (although I am not entirely sure that this is a new release - it is my first exposure to it). These are examples from Zynga's - which features a Farmville Fan Widget. The widget has:

- logo - become a fan button - Farmville's feed - Farmville's fans (22.5m!) Notice that the latest newsfeed post has a video play button. Here are two examples, both of which play the video in-line: Facebook Video and YouTube. You will notice that it is still a little funky as the videos are not sized corrrectly for the widget's widget / height. Nevertheless, it makes the widget far more interactive:

Facebook Video: Example

YouTube Video: Example