One of the problems with this is streaming video. You can do video downloads a'la Youtube, but that's because those fit the model: they are mp4 files with a header atom at the front containing index information for the entire file. You can't do this in live streaming, for obvious reasons. The guy I had talked to basically concluded that it was impossible to view a live video stream on the iPod with an ordinary application, since Apple's API was closed and the built-in ARM CPU was an order of magnitude too slow to do the video decoding on its own with a custom decoder rather than using the built-in decoder chip.
step 1: Implement a flash player in javascript
step 2: Dodge Steve Jobs personal assassination squad
step 3: Profit.
Just because the source code is publicly viewable doesn't mean anyone can take it without permission; small people will, but the companies that would pay you for such a thing can't get away with that kind of piracy.
The HTML5 video tag is not supported, if I go to http://webkit.org/blog/140/html5-media-support/ I get the "This is fallback content..." message at the bottom of the post. The current official desktop Safari build handles the video tag, so perhaps it is coming.