I can only manage to get QT to play by using an Open URL script step, which opens the file in a new browser window - which is not what I want!
With this scenario, you DO need to gave your movies in the Library/We Server folder, if using FM Advanced, otherwise (I believe) in your Fielmaker/Web folder, if using IWP under FM7.
Did you ever get QT movies to play in a container window successfully?