Using the Windows Default screensaver you can set it to play movies, is there a way to do that in displayfusion pro? I know when I select Windows Live Photo Gallery and select videos I get a warning saying the selected screen saver may not work. Is there an alternative option?

Download RAD video tools. For about a decade now, the primary use of this program has been to create and edit video game cut scenes but it can also be used to produce custom screensavers. Use this program to create a .bik file by selecting the video you want then clicking "bink it". Once processed, select the .bik file and hit advanced play. Enable the option "create screensaver instead of .exe". A few seconds later you will have a screensaver that can be used on each monitor in a multi-monitor screensaver setup.

PS RAD uses Quicktime codecs so you'll probably need Quicktime as well