As noted in the post, iOS devices will only do video tags fullscreen.
Apple's JS disables the animation for iOS 4.x and below, so maybe that's why it wasn't playing on your friend's iPod.
I see Apple is really embracing the idea of "the one web" here, introducing web-fragmentation even among their own devices.
Apple has long stopped impressing me. Back in the days when they were the clear underdogs, they were for web-standards and a unified web, because they saw how that was good, and that was what allowed them to become what they are now.
Now it seems they don't really have so much ideological issues with how web-pages should be built anymore. Funny thing that.