Microsoft developer viewpoint on how and why PowerPoint plays multimedia files. Considered dense reading for non-programmers.

How PowerPoint 2003 Plays Multimedia Files in a Presentation
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http://msdn2.microsoft.com/en-us/library/aa168133(office.11).aspx

The MSDN area had related sublinks for PowerPoint technical articles. Written in 2004, thus pre-Vista and pre-PowerPoint 2007.