Desktop Movie is a simple freeware application to play movie files on your desktop. The player projects the movie to the background replacing your background image temporarily.
The player is based on DirectShow meaning every movie you can play with a DirectShow player can be played with Desktop Movie too.
At the start, you can choose your movie and the player starts. A tray icon can be found on the tray bar during the playing process. Here you can load another movie, pause, rewind or forward the video and set the volume level.