The Media Player module for Moodle 1.9 is a simplified version on the SWF Activity Module for Moodle 1.9 that uses the JW Player 5.5, http://www.longtailvideo.com/, to playback videos, audio, playlists, etc.
In Moodle 2.5, I'm experimenting with providing extensible media playback in the SWF Activity Module so that having 2 modules is no longer necessary. It will still support the old JW Player, which isn't free and open source, as well as StrobeMediaPlayback, which is free and open source and other media players can be added.
I've just finished putting in plugin/extension support for Flash applications but only for one plugin at a time at the moment, but both the JW Player and Strobe support XML configuration files and remotely hosted extensions.
It can also offer HTML5 video/audio fallback but I've yet to implement that.
So if all goes well, the SWF Activity Module for Moodle 2.5 will provide media playback with two media players, JW Player and Strobe, that have all kinds of plugins/extensions available as well as supporting other XML, web service, and database driven Flash learning applications like these: http://blog.matbury.com/call-software/
Mmm... a complicated answer to a simple question.
I hope this helps!