If the media fails to play in the MCI player it will not play properly in PowerPoint. You may then open your media file in the normal manner and play it.
This will start the MCI player (Not the Windows Media Player) used by PowerPoint. To do so, for Windows XP, click Start > Run and type “ mplayer2.exe” in the command line box and click OK.
You may test your machine set up by manually starting the MCI player and playing the media file. Microsoft has an article explaining the How in details here. Take-away message: So you should always test your videos on MCI first! That means even if your videos play fine on windows media player, it has nothing to do with whether they will render fine in your presentation. Instead, It uses Media Control Interface (MCI). Powerpoint doesn’t uses windows media player for video playback by default. If you want to play high-quality videos in your powerpoint slides, this is a must-read to avoid embarrassing black box during your presentation.