Yep, you can use USB for just most storage devices and will detect and play several types of movie files, but you can also throw in a DVD and watch a movie (seems iffy with pirated stuff, but encoded/normal ones are fine) and it will detect mp4 files, etc. in USB storage folders and ask which you want to use.
There's also auxiliary input jacks...which I found totally odd...but you can plug in a video camera, gaming system, or portable video player.
You can adjust display, wide screen, normal, etc. quality, audio. It's a lot more than I expected and will ever use. The video functions won't work while the car is in motion...which given there's only ever going to be one passenger...make sense to some degree.
I'll post the pics in this thread too.
Hope that answers your question!