Video not playing can happen if the video is not getting converted to FLV format.
To verify, do the following.
Admin > Miscellaneous > Video Processing
Set it to Realtime
In FTP delete the file
This is the debug log file, you will able to see details about video processing in this file.
Now login to your web site as user and upload a video.
After upload if video is not available in the web site, check the status of the video in Admin > Process Queue.
If it says convert error, problem is with mencoder installed on your server, to verify your mencoder is able to convert the video, refer
Video not getting converted to flv