Try `mplayer -vo aa <video_file>`

Add telnet streaming for extra points, like they did to World Cup 2006: http://ascii-wm.net/doc.php

I wrote a program for playing video in ASCII on an OpenVMS console (VT220 orange text serial console) for a university project. I played the Matrix dojo fight scene for the final presentation, it was a big success! :)

YouTube had this for April Fool's, where you could watch any video in ASCII art.

libcaca to the rescue! http://caca.zoy.org/wiki/libcaca

telnet towel.blinkenlights.nl

starwars done in ascii ;)

Do it! That would be awesome!