Yes, this is possible with a Silverlight mod, and if your videos are in WMV format.
Silverlight automatically enables "scrubbing" (which means seeking to a later point in the video, without pre-loading or buffering). As for the Flash player, that can be updated as well with the latest versions of JW Player which enables you to use lighttpd for real-time streaming. Has to be done at the server level though.

PM if u need anything else...