Now a days all of you look excited about Windows Vista Ultimate DreamScene which will allow you to play high-definition video content as your wallpaper. Dreamscene is only available for Windows Vista Ultimate users, but do you know that, you can play video as a wallpaper on your Vista Home Premium or Basic version or even on Windows XP also?
Download VLC Media Player and open any video in it.
Right click on the video and click on "Wallpaper"
That's it. You have an animated wallpapers now!
If don't see the wallpaper option:
Settings > Preferences > Video > Output Modules > Direct X
Check the Advanced Options box in the bottom right hand corner.
Check Enable Wallpaper Mode. Now when you right click on your videos, you should be able to see a Wallpaper option.
Settings > Preferences > Playlist >Repeat All
For removing VLC from the taskbar
Settings > Preferences -> Interface -> Main Interface -> wxWidgets and uncheck Taskbar and enable Systray icon.
In Windows XP your icons and it's text can look weird
Click here for more Dreamscene videos.