If you want to watch video on the iPod Video the most reasonable option, unfortunately, is to install iTunes and sync them to the iPod that way, and watch them in the OF. The hardware video decoder is always going to be far, far more powerful than anything we can implement in software in Rockbox.
An alternative would be to use a different program that knows how to synchronise with iPods, but I'm not sure if anything else supports video. For this purpose, also, you may want to *not* update the OF, as it's possible that some ipod sync programs only support certain OF versions.