Update: We just got word from Bookeen. They say that everything is done on components that are available on the market with Bookeen's software - and they expect such performance to be available on the next-gen e-readers to appear soon. The power consumption, interestingly, is said to be equivalanet to a non-backlit LCD while running videos. The video, by the way, is a standard H.264 with no special treatment needed.
Bookeen's R&D team has achieved smooth video playback on an E Ink Pearl display. They are using a TI OMAP 3621 CPU (with its embedded software controller) and show a H.264 encoded video:
We don't know what are Bookeen plans here - whether they'd want to release a video-enabled reader or perhaps license their new technology?