There IS a catch with video if elxis is not installed in the root dir... It won't work untill you change MOS FLV Video to reflect the correct dir. And, please, try to install it on another server, and see what happens.
I think the problem is that the session save path in your server's configuration has been set to /tmp (default setting) but the Open Base Dir restriction does not allows PHP to access it as it is outside your user path. So, I think it is a server misconfiguration issue.ini_get('session.save_path') echo to you during the installation that the session seve path is /tmp. You can also check this from administration -> system -> system information -> php tab.