The video has been put together by one of our readers, Vinay, and shows how you can use your Nexus 7 as part of a portable car entertainment system (which could also be used in hotel rooms, etc.). This set up works without rooting your Nexus 7.
Using a Samsung Optical Smart Hub (~£70), USB Flash Drive, Nexus 7 (and an inverter for car use), you can read, write or stream files from CD, DVD, flash storage or a hard drive. Two people are able to watch the same DVD on different devices, but at different stages if you so choose, and up to for people can stream files from USB memory.
The ability to write to various storage solutions also gives you the means to easily backup your Nexus 7. For more info, see the comments on the YouTube video or see this XDA thread.