iTunes 4.8 is out. It's not on the Software Update in OS X (well, not mine), but if you go to the iTunes site you can get it manually.

It has a new feature; video playing. You can add videos and watch/catalog them from within iTunes. This is cool because I have a lot of music videos and I can finally keep them in the same place as my music. The down-side is that you only get two options of how to watch the video.. either in the 'album art' box or full-screen. This means you're stuck with a thumbnail sized video.. or not being able to do any work. I'd rather see it in the visualisation section so you can keep working while you watch music videos.

Update: It turns out you can click on the playing video in the Artwork area and it opens a new resizeable window with the video.