One of my developers picked this up at WWW2010 yesterday in the Media on the Web Developer’s Track session.  Amazing what modern browsers can pull off:

http://craftymind.com/factory/html5video/CanvasVideo.html

This makes me really eager to see some standardization on video codecs and streaming protocols.  Note to google: please open VP8 and back it up with your muscle to give the world a true open video standard!  If you can wire a town for gigabit fiber, surely you can foster the adoption of an open video standard.