Test 1: Upload a video with Sandvox then changing it to 'Movie Source: From URL'.
Result: Works

Test 2: How does video moved directly from an Xacti camera SD card look.
Result: Works in browser AND on iPhone

Video Duration: 00:33s [6MB] Data Rate: 1500kbit/s

This video shows a Waldner Biotech 'Silence' Grain Mill grinding maize corns.

This is the unaltered video from a Sanyo Xacti CG65 at TV-HQ setting (640x480, 30fps, HQ MPEG-4 AVC/H.264) shot in electric light, indoors. Interestingly, it will play on an iPhone using the Safari mobile browser without any alteration to the movie file from the camera.

It was imported directly from the SD card into iPhoto and drag-and-dropped from the iMedia Browser in Sandvox. I used a Photo Album collection page and dropped the dragged video onto the Video Mishmash icon in the Sandvox's Site Outline.

After publishing, I moved the movie to a different folder using an FTP client, then linked to the movie's new URL  from the
Inspector Movie Source (it doesn't have to be moved. It can remain in the _Media folder) e.g. -->