My friend Clark, who seems to be my only resource for anything, pointed me in the direction of an incredible little app called Trans Lucy 2. It's a video/DVD-player that actually lets you modify the transparency of the video window and then overlay it on your screen, so you can watch whatever's playing while working/chatting/surfing in the background. Perfect for people with small screens, or folks (like me) who hate constantly moving around windows depending on what they want to do. Right now I'm watching a Thomas Jefferson biography (thanks, Netflix!) while talking via iChat and writing this post in Camino. Depending on what task I wish to focus on, I just change the focus of my vision. And it works really well.
A registered version of Trans Lucy 2 is $15, but you can download a demo version at www.translucy.com.
Update: seany explains the best benefit of Trans Lucy over other apps with similar functionality: "The nice thing about this is that you can 'click through' the movie and work as normal. In other apps, their windows are selected when you click anywhere. To all intensive purposes [sic], the app disappears except for the video. I find it great for following video tutorials as I can track the actions in real time without swtiching between windows."