What does the nightly build have to do with it?
Is it the same feature as http://www.zenphoto.org/trac/ticket/331?
Yes that is that ticket. As far as we know there is no way to generate thumbs from movies without installing a native php extension called ffmpeg to your server directly (which Gallery2 for example need for this feature). This can't be done with a general server setup and not everyone on shared host is allowed to install such extensions. If no one knows of a alternative, this at the far end of our to do list.