How to display youtube-like video player in website?
You may need to check into Flash programming with actionscript if you want to build the project as well. This is because if you want to play mpeg/wmv files then the browser needs to have a plugin that supports it and not everyone on the web does have that. Flash, on the other hand, has a large browsing audience. So the alternative is to convert it on the server.
EIDOS made a video mixer before they launched the Kane and Lynch game (I unfortunately can't find it online anymore). It was possible to edit video together with music and sound clips on a timeline.
There are several ways to get php work together with flash such as using AMFPHP. But you still need to hack in actionscript.
If the visitor can view it, the visitor has already downloaded it. That's also how youtube works, you download the video otherwise you can't see it. The computer can't show you something it hasn't downloaded.