In the Android Market for $1.49, it pretty much picture in picture. It puts video player on screen over everything you do.
You can resize the screen and move it around. I noticed some slow down on my Xoom and I'm oc'd to 1.4.
My main problem was my keyboard, anytime it comes up it doesn't want to respond or go away when stick it is running.
Pretty slick app once some bugs are worked out, for now its still usable.