Hey all.

I recently reinstalled my retail version of Dark Fall: Lights Out. This is just the vanilla Adventure Company release.
In the past, I had the infamous "red x" missing movie problem. I wanted to tinker around and see if I could get them to play in game.
Watching the movies outside of the game breaks the atmosphere a bit for me.

The problem seems to extend from what media player that MPEG files are associated with on your computer. On my comp, they were associated with WMP.
Here's how I got the movies working. It's a bit of a roundabout method but it did the trick.
Grab a copy of QuickTime (I'm using 6.2) and install it. After installation, go into the MIME settings and associate QT with MPEG and leave the MOV association alone. Uncheck all other file associations. You can always go back and change this at a later time.
Launch Dark Fall II and enjoy the movies as they were intended to be seen.

I tested this on Windows XP SP 3. It should theoretically work on Vista and 7 machines too.
Enjoy! Hope this helps.