Unfortunately, videos ads will not currently work as instream spots.  Due to the nature of the differences between native audio codecs and native video codecs, a video ad will not play as an instream ad.  Our development staff is currently investigating if this could be done and exactly how. 

That being said, users can add a video swf as a synced banner but the "root" audio ad must be a .mp3 or .wav file for playback instream.  As a work around you could upload a mp3 with a very low volume audio track and use a swf video as a Synced Banner.  This would allow the audio track of the swf file to be heard on the stream while the "video" plays in the 300x250 window on the player.