What does it do?
Displays thumbnail and full size images and plays video.
Where does it get the data for the images and videos to display/play inline?
The data to populate the intranet version is pulled from SharePoint using the URL protocol (no web services required provided you are hosting this inside SharePoint) I will post the web service example soon.
For the demo on this site I uploaded as an application to the Silverlight Streaming Service. The SharePoint list for managing what items are displayed in the filmstrip I created on my Office Live site but published a public list view and use the RSS feed to load the Filmstrip since this version is all in the cloud:)
See previous post for more details
Click the waterfall thumbnail to test the video playback