New version coming soon...will support older iphones (3g and earlier). After that, the next update will let you pick the videos without having to make a playlist...
Basic steps for making this work...
1) Make a playlist with the movies you want (note, if you bought it from the iTunes store, it probably won't work)
2) Sync the playlist onto the iPhone
3) open babyPlay and select the playlist tab at the bottom
4) place iPhone into case made by FisherPrice http://www.fisher-price.com/fp.aspx?st=2341&e=product&pcat=bulnl&pid=64176