Is it possible to explain the rules of a game using a quick video clip built into your app? I haven't come across a game that does this! If so are some game apps doing this already. Examples please.
There's nothing stopping you doing this, but as app-size is often a priority including video is not necessarily a good decision.
Several GameLoft games use video for intro movies (most of the older ones I think - I haven't bought any of their newer ones so I don't know). Firemint's Real Racing does this as well, and I'm sure there are others. I haven't seen a game use video clips beyond the pre-menu intro, though, so there may be some performance issues with video once your game engine is fully loaded into memory, especially if your game is fairly resource intensive to begin with (like say, full 3D). For a game that's mostly 2D though, I don't think it would be a problem. I've even layered Core Animation stuff over a playing video before and there weren't any real issues.
On a related note, does anyone know if there are any libraries available to play small videos in non-fullscreen mode? Either OpenGL/Cocos or a UIView-based app.