No, don't even bother.
mp4 files by default aren't crawled by UpdateMedia, but this has been fixed in 0710. use the Media Files Sync option in the web admin to select the file, and call it a LinuxMCE Video File.. It will then play properly.
I dropped the system down to the KDE desktop, and started to play the file in Xine. Xine reported back an error saying that it wasn't running properly. Of course do you think I think I can remember the error? It did tell me to either drop it from 24bpp to 16 bpp also said I should run xine-check which couldn't find a couple of things of xine...damn when i get home again, i'll re run it and let you know what it says...
hmm...is the gyration keyboard supposed to work with linuxmce as well as the mouse?
could you post more information on your system specs. As people have said to me, it might help us understand more of whats going on with your system if we know the entire setup.